Published: 2020.7.8
The current iteration of Medicare’s accountable care organizations (ACOs) does not appear to generate significant savings. Here are some estimates of savings based on some publications I could find:
| Organizational entity | Estimated change in healthcare spend (mean [standard deviation] unless noted otherwise) |
|---|---|
| Medicare Hospital-Integrated ACO (Medicare Shared Savings Program) | -0.4% (-1.1% to 0.4%) |
| Medicare Physician-Group ACO (Medicare Shared Savings Program) | -3.1% (-4.2% to -2.0%) |
| Oregon’s Medicaid Coordinated Care Program (Medicaid) | -6.7% |
| Reference pricing (comparator 1) | -4.8% |
| Bundled payments (comparator 2) | -1.2% (-2.3% to -0.2%) |
| Massachusetts population-based global payment (Comparator 3) | -7.1% (range -12.0% to -0.2%) |
| Hawaii population-based primary care payment (Comparator 4) | 1.0% (-1.3% to 3.4%) |
There are many potential reasons why ACOs do not save meaningful dollars for the healthcare system. I will focus on one: smaller physician practices lack the infrastructure to reliably identify ACO members during a clinical encounter. Even if they do identify a member as belonging to a particular ACO, they may face barriers to helping identified members connect to ACO-specific resources to improve care delivery.
A health insurance company should be very interested in supporting smaller practices deliver ACO-specific care to its members. First, working with smaller practices allows health insurance companies an alternative to large health systems who tend to negotiate higher payment rates. Second, health insurance companies who can support more consistent care experiences across care delivery organizations should retain members at a higher rate than their competitors.
Before the advent of electronic medical record (EMR) systems, health insurance companies would have to travel to each provider office to interact with the provider and the office staff around care delivery. Today, most provider offices have some method to access patient records electronically, simplifying interactions between payers and providers. Assuming provider practices have EMR processes that could be shared with external staff, insurance companies could augment a provider’s back-office staff by reviewing charts, following up on test results and even managing prior authorization requests for members seen by the practice.
From the providers’ perspective, allowing payers to support their patients’ work might be seen as both a gesture to reduce the practices’ overhead as well as a way to provide services unique to a specific health insurance plan. Since most providers see a variety of patients, each with a potentially different version of a generic insurance company’s offerings (e.g., a UnitedHealthcare fully-insured commerical plan may be different from a UnitedHealthcare-supported employer plan), office staff are unlikely to look up each patient’s specific plan details when considering optional services.
As additional competitors enter the healthcare market, it would behoove both providers and payers to consider new ways to engage patients to promote higher-value care. Shared savings within most ACO contracts seems to be the most promising vehicle to migrate our healthcare system from fee-for-service to value-based arrangements, but to-date, the shared savings structure has not supported innovative care delivery to meaningfully reduce healthcare expenditures or promote higher levels of health. Tighter integration between providers and payers might enable payers to customize the delivery of member-specific offerings within a practice while simultaneously supporting smaller practices who treat members from multiple payers.