Becker's Hospital Review

ACOs 12 ACOs: The Least Agreed-Upon Concept in Healthcare? (continued from page 1) The ACO, or accountable care organization, may very well be the least agreed-upon concept in healthcare today. The term ACO was coined in 2006 by Elliott Fisher, MD, director of Dartmouth Institute for Health Policy and Clinical Practice in Hanover, N.H. The concept resembles that of health maintenance organizations, with a focus on cost savings and accountability. One of the largest differences between the two models is ACOs' size, with ACOs being smaller than HMOs. The concept was embraced by lawmakers and built into the 2010 Patient Protection and Affordable Care Act. In the first few months — even years — after the passage of PPACA and after the publication of CMS' longawaited final ACO rule, it wasn't uncommon for healthcare experts to call ACOs the "unicorns of healthcare." Critics said the healthcare law encouraged a model everyone had heard of, but nobody had seen. The unicorn moniker has since fallen to the wayside. As of January 2013, there were 428 ACOs — sponsored by commercial payors and Medicare — across 49 states. That's a significant increase from March 2010, when there were just 10 ACOs across the entire country. From late 2011 to early 2013, Medicare has contracted with more than 250 ACOs nationally with 4 million total Medicare beneficiaries. Another 100 to 200 ACOs are expected to be added in the next two years. The model has spread just as quickly on the commercial side. For instance, last year, commercial insurer Cigna announced its plans to have one million patients enrolled in its ACOs by 2014 — a tenfold increase at the time of the payor's announcement. Although the model has grown by leaps and bounds in the past three years, proliferation does not necessarily thwart criticism. ACOs have stirred debate since day one, and they've been subject to a few louder critiques as of late. In February, two professors from Harvard University and a senior research fellow from Innosight Institute, an education and healthcare think tank, published an op-ed in The Wall Street Journal, highlighting what they called "flawed assumptions" that will ultimately lead ACOs to fail. "The ACO concept is based on assumptions about personal and economic behavior — by doctors, patients and others — that aren't realistic," the authors wrote. A month later, Deloitte released its "2013 Survey of U.S Physicians," based on 613 responses from primary care physicians, surgical specialists, nonsurgical specialists and other physicians. In a somewhat unpromising finding, only one in three physicians reported familiarity with ACOs, episodebased payments and patient-centered medical homes. That meager rate of familiarity was noteworthy, given that ACOs have been part of the healthcare reform law for more than three years now. To punctuate the dampening events, the 32 Pioneer ACOs sent a letter to CMS, asking the agency to reconsider the quality metrics they are required to report on in 2013. The Pioneer program was designed to be a high-risk, high-reward model with an accelerated track to ACO formation. For the past year, Pioneer ACOs received payment for reporting data on metrics. In 2013, the ACOs are slated to move from pay-for-reporting to pay-forperformance. In year three, Pioneer ACOs that have shown a specified level of savings over the first two years will be eligible to move a substantial portion of their payments to a population-based model. In their letter, the Pioneer ACOs urged CMS to hold them to reporting status only in 2013, just as they were this previous year. The Pioneer ACOs also asked CMS to delay 2014 payments tied to performance benchmarks. Those benchmarks are being applied this year for the Pioneers, and the 32 organizations claimed that 19 of the proposed "flat percentage" benchmarks were higher than other quality performance targets. In April, CMS denied the Pioneer ACOs' requests to delay the pay-for-performance period and said performance benchmarks will apply to Pioneer ACOs in 2013. The discord between the ACOs and CMS could be considered a significant hiccup in terms of confidence around the Pioneer ACO program. Here, various experts weigh in on why the healthcare industry has been slow to accept ACOs, the five most common arguments against the model and what it will ultimately take for ACOs to become a proven strategy for population health. "There is no magic bullet" Stuart Lockman, Esq., is president of Michigan Pioneer ACO, which is Detroit Medical Center's ACO. The ACO is managed by the DMC Physician Hospital Organization, which includes approximately 1,100 providers, and it is one of CMS' Pioneer ACOs. "ACOs have really proliferated in the past three years or so, considering that this was a concept that was only written about in academic journals around five or six years ago," says Mr. Lockman. "To have 300 of them up and running already is sort of a remarkable achievement." Michigan Pioneer ACO was one of the 32 Pioneers to sign the letter to CMS requesting a change to the quality reporting requirements. The ACOs' letter said CMS does not yet have mature data for empirical benchmarks, a considerable roadblock, and that CMS' proposed benchmarks are loftier than those in commercial contracts and difficult to meet. But the problem may stretch beyond the Pioneers. Mr. Lockman says problems around data and measurements are likely to present themselves in any ACO arrangement. "ACOs are driven by data," says Mr. Lockman. "The question is the availability and extensiveness of the data with which you have to work. We have our own issues with CMS in terms of the data we receive, and [other ACOs] have data issues as it relates to each commercial payor or insurer. In terms of how to proceed, it almost becomes an individual approach." As far as expenses go, cost expenditures on Michigan Pioneer ACO's 12,900 patients have remained flat compared with the baseline data provided by Medicare. That means the ACO is spending no more or less on its patients than it has historically spent. Mr. Lockman says he's hestitant to jump on the bandwagon when it comes to broad criticism of the ACO model. "There is no one magic bullet," he says. "My feeling is that it took us years to get us to the point we're at. You can't expect everything to be changed overnight. ACOs put emphasis where it should be, which is on cost and quality." Marc Bard, MD, co-director and physician leader of Tufts Health Care Institute in Boston and author of "Accountable Care Organizations: Your Guide to Strategy, Design and Implementation," says the concept of ACOs is so complex, there are bound to be contentions. "Anybody looking at the ACO and saying that it will or won't be the endgame for healthcare is missing the point," says Dr. Bard. "It's an evolutionary stepping stone in building a system of care," says Dr. Bard. Five frequent arguments against ACOs Criticism of ACOs in the past few years has varied in extremity and logic, but there have been a few recurring arguments made against the pay-forperformance model. 1. In the grand scheme of healthcare spending, ACOs' savings will be slight. Will juice from ACOs be worth the squeeze? Will incentives be enough to change physicians' behavior? How many administrative costs will ACOs accrue? These continue to be some of the most pressing questions about the model.

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