I was recently at the Spring Conference of the National Association of ACOs (NAACOS) in Baltimore, and attended nearly a dozen sessions. Given the continued challenges many accountable care organizations (ACOs) have had in achieving shared savings, the biannual NAACOS events are excellent opportunities to hear from leading ACOs from around the country. In listening to the speakers as well as conversing with other attendees, I came away with nine key observations.
1) Difficulty: ACOs in general, are working hard to be successful, but that success is hard to come by. Comments I heard confirmed the statistic that only about a quarter of ACOs achieved shared savings. Due to this difficulty, there appears to be an increased appetite for tools that can increase the likelihood of success.
2) Uncertainty: There remains a great deal of uncertainty about value-based care—even among the winners. I spoke with a physician from one of the most successful Medicare Shared Savings Program (MSSP) ACOs, but he admitted that to some degree, they “didn’t know how they did it.” This uncertainty affects decisions to continue in programs or engage in new ones, and also affects IT investment decisions. Providers must weigh the size of any IT investment against the possible return.
3) Benchmarking: As any shared savings are based on the comparison of actual utilization against the Centers for Medicare and Medicaid Services (CMS) established benchmark, there is strong interest in the methodologies CMS uses to establish the benchmark, e.g. historical v. regional fees, and the process for “rebasing” those benchmarks over time. There is also interest in analytics solutions that can help (1) determine whether or not to participate in a specific program based on the benchmark, and (2) help manage their network of providers against the benchmarks for programs in which they participate.
4) What’s Next: Organizations are considering participation in CMS’ Next-Generation ACO (NGACO) program. While it provides some advantages for home health, telemedicine and skilled-nursing facility (SNF) waivers, it also comes with two-sided risk (i.e. greater potential upside but the addition of downside risk). Given the difficulty and uncertainty noted above, organizations are proceeding very cautiously and trying to garner as much information as possible before deciding.
5) Bundled Antipathy: There is a level of antipathy among ACOs for awardees in BPCI (Bundled Payment for Care Improvement). This antipathy results from the fact that CMS does not want to double-count (and double-credit) savings realized. Any savings realized for beneficiaries that qualify for bundled-payment services are credited to the BPCI entity and deducted from the potential shared savings of the ACO. This is true even if the beneficiary is a member of the ACO. There is some feeling of unfairness as the ACO is responsible for a beneficiary’s utilization over the entire year while the BPCI entity only has to manage utilization during the length of the episode of care.
6) Variability of PAC: Whether for bundled payments or MSSP, several presenters called out the wide range of costs in post-acute care, and cited it as a big opportunity for cost management. This recent Wall Street Journal article also discusses the same issue of variability of costs.
7) Survival of the Fittest: While providing quality care to patients is always central to a provider’s mission, competing within their market is also on their minds. Strategies and initiatives adopted are business decisions that include the goal of capturing market share from competitors.
8) Diversification: The advice to the audience from a panel of large, mostly successful ACOs was to nurture other sources of revenue until the hoped-for shared savings were realized. This includes continuation of fee-for-service (FFS) business, participation in the episode-based BPCI, etc. There was evidence of one-off agreements with large employers for a specific bundle or set of services. As the industry makes its shift to value-based reimbursement, I expect we’ll see lots of different activities (though headed in the same direction) rather than a unified strategy.
9) Patient Care vs. Population Health: Although ACOs are participating in a variety of value-based initiatives, the language of presenters and participants tended to focus on the quality care of patients more than managing the health of populations. This may be a reflection that many of the speakers were physicians, but it seems that there remains a mindset around individuals rather than populations.
As fast as healthcare has been evolving recently, I look forward to tracking these and other trends over the course of the year. I hope to circle back to them during the Fall 2016 NAACOS event to see if they have changed.