ACO RAP SHEET
Executives say California's experience with ACOs suggests a profileration of ACOs nationwide may raise prices for healthcare services
Some say accountable care organizations are like unicorns: They want to believe in them, but they’ve never seen one. Others say ACOs do exist, and they know this because they’ve seen them in California.
ACOs bring together providers and then reward them for taking responsibility for the quality of care for their patients while controlling costs. And everyone in healthcare seems to be talking about them these days.
In California, many providers have been working in ACOs for decades, and they say they can work well—although there are pitfalls and limitations. California ACOs could be models for providers in other parts of the country, but they also offer up lessons learned through the years of experience.
“It’s not the type of organization that defines the success of an ACO, it’s the leader- ship,” said Tom Williams, executive director of the Oakland, Calif.-based Integrated Healthcare Association, a leading provider quality and pay-for-performance group. “For success, there needs to be alignment between hospitals and physicians.”
Out of the hundreds of pages of the Patient Protection and Affordable Care Act, fewer than a dozen are devoted to ACOs. But those pages are causing a stir in the provider community. That’s because the law gives providers incentives to start ACOs. The Medicare Shared Savings Program, slated to launch in January 2012, allows providers to set up ACOs that will account for the quality, cost and care of Medicare fee-for-service members for at least three years. The CMS is expected to issue regulations on the program in December or January. On Oct. 19, the National Committee for Quality Assurance issued a blueprint on ACOs for public comment.
The law also allows the new Center for Medicare and Medicaid Innovation to evaluate delivery system reforms, including ACOs, by January 2011. Medicare and Medicaid pilots on ACOs could start ahead of the shared savings program. Others are experimenting with pilot projects around the country.
Half of Californians
In California, the ACO experience springs from the managed-care boom of the past 30 years, according James Robinson, director of the Center for Health Technology at the University of California at Berkeley, who wrote a paper on the topic that was issued by the Integrated Healthcare Association last week.
About half of insured Californians receive their care through some type of ACO (See chart). The Golden State has 285 physician organizations with characteristics of ACOs. These ACOs run the gamut from Kaiser Permanente, the managed-care giant with 6.7 million members, to small-size independent physician groups. Hospitals also have
At an accountable care organization conference last week in Los Angeles, members discussed the most effective ways to implement ACOs since the passage of healthcare reform this year.