The results from the first year of the Centers for Medicare and Medicaid Services’ (CMS’s) Pioneer accountable care organization (ACO) demonstration show that in order for ACOs to succeed, value-based payment models need to expand quickly to other payers beyond Medicare, according to an article in the Oct. 2 Journal of the American Medical Association. The Pioneer program demonstrates that for the experiment to ultimately succeed, “value-based payment and patient incentives to reward clinicians and health care organizations that offer more real value to patients must spread rapidly to other payers. Otherwise, the very delivery systems that are improving cost and quality may drop out of these important experiments,” the article said. The lead author was John Toussaint, chief executive officer of Thedacare Center for Healthcare Value, in Appleton, Wis. ACOs are groups of doctors and hospitals organized to improve coordination of care for their patients. Under the Affordable Care Act, ACOs have been established for Medicare beneficiaries in what is known as the Medicare Shared Savings Program. The Pioneer program is administered under the Center for Medicare and Medicaid Innovation at CMS and is designed for health care organizations and providers that have experience coordinating care for patients across […]
The results from the first year of the Centers for Medicare and Medicaid Services’ (CMS’s) Pioneer accountable care organization (ACO) demonstration show that in order for ACOs to succeed, value-based payment models need to expand quickly to other payers beyond Medicare, according to an article in the Oct. 2 Journal of the American Medical Association.
The Pioneer program demonstrates that for the experiment to ultimately succeed, “value-based payment and patient incentives to reward clinicians and health care organizations that offer more real value to patients must spread rapidly to other payers. Otherwise, the very delivery systems that are improving cost and quality may drop out of these important experiments,” the article said.
The lead author was John Toussaint, chief executive officer of Thedacare Center for Healthcare Value, in Appleton, Wis.
ACOs are groups of doctors and hospitals organized to improve coordination of care for their patients. Under the Affordable Care Act, ACOs have been established for Medicare beneficiaries in what is known as the Medicare Shared Savings Program.
The Pioneer program is administered under the Center for Medicare and Medicaid Innovation at CMS and is designed for health care organizations and providers that have experience coordinating care for patients across care settings. First-year results, announced in July, found all 32 of the Pioneers successfully met quality measures for the first performance year, with all earning incentive payments for their reporting accomplishments. By contrast, less than half performed well enough against cost benchmarks to share in savings for the program.
According to Toussaint’s article, “How the Pioneer ACO Model Needs to Change: Lessons From Its Best-Performing ACO,” many hospitals participating in the Medicare ACO programs are still caring for patients under a traditional fee-for-service model operated by private insurance and Medicaid, without any shared savings or incentives for high-value care. They are also using the same care processes for efficiently managing the privately insured patients as they are for Medicare patients.
As a result, when a hospital achieves savings by reducing its overall volume of services, such as decreasing patient readmissions, overall revenues still decline. So, every time a hospital admission is avoided for a fee-for-service patient, it means less revenue with no chance to share savings, Toussaint said in the article.
“Unless all payers quickly move to value-based payment systems or give insurers incentives to preferentially use health care organizations that provide greater value to patients, more organizations (especially those unable to shift costs to other payers) will discontinue participation in both of Medicare’s ACO programs and other related arrangements,” Toussaint said in the article. “That is why (in most markets) commercial insurers, self-funded employers, and state administrators of Medicaid must join with Medicare to discuss health system incentives that are based on value for patients, not just shared savings.”
Toussaint said strong federal-state and public-private partnerships will be needed to coordinate all payers in each region across the country and ensure that high-value care is rewarded consistently.
Takeaway: Shared-savings models will fail unless all payers move to value-based payment systems.
