Accountable care organizations (ACOs) are part of the foundation of the healthcare industry’s transition to value-based care and purchasing.
Since the passage of the Affordable Care Act (ACA), ACOs have realized clinical and financial improvements. Organizations in the Medicare’s largest ACO program average a quality performance score north of 90 percent, and CMS estimates that the program saved about $954 million from 2013 through 2015.
However, the federal government says ACOs could do more to reduce costs and improve care quality. And the organizations can achieve the goals through downside financial risk.
ACO programs with higher financial risk levels compared to the MSSP are generating greater savings. For example, Next Generation ACOs, which assume up to 100 percent downside financial risk, produced nearly $62 million in net savings to Medicare in just one performance period.
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This is not a new thought, but don’t confuse cause and effect. Next Gen ACOs aren’t generating high savings BECAUSE they’re in the next gen model, it’s exactly the reverse … because they’re generating savings, they felt relatively comfortable getting into/staying in that risk structure. There is a very strong selection/survival bias operating here, organizations make choices to go where they perceive their upside:downside risk to be good, and avoid going where their perceived upside:downside is bad.
I agree with you Douglas that many MSSPs, which choose to be in downside risk models, do so based on their perceptions of success, usually due to their positive experience with upside models. The CMS Pathways suggest a “glide path” toward success, However some will fail along the glide path, mostly for preventable reasons.
Each paragraph in this article could be a risk management seminar breakout session. The subject is indeed that complicated.
Prior to the emergence of MSSP/ACO startups about 7 years ago, I had the opportunity to work on consultant teams hired to turnaround failing HMOs at full risk across Medicare, Medicaid and commercial populations. The risk management principles we used to effect the turnarounds are the same ones needed to achieve success with ACO downside risk e.g. risk prevention, risk reduction, risk transfer and others.
There is no easy way for MSSPs to move along the CMS glide path. As the article points out, developing risk cultures, generating actionable data and monitoring care transitions are all necessary actions. However, ACOs must come to understand such actions are just part of a much more extensive risk management program. I believe the reason most MSSP and ACO stakeholders are fearful of risk is they are not familiar with the field of risk management which has been around a long time. It is time for them to do so.