ACO service industry blooms
Arocky start to Medicare’s approach to accountable care has done little to deter companies eager to market ancillary services and products to hospitals and medical groups.
The University of Pittsburgh Medical Center’s health plan and the Advisory Board, a consulting company, announced a joint venture last week to market accountable care technology and outsourcing services. In Minnesota, meanwhile, specialty benefit underwriters the Star Line Group, insurance brokers U.S. Advisors and consultants Ascendant Care said they would sell reinsurance to accountable care organizations in the Medicare shared savings program.
And one of the third quarters’ largest venture capital investments was the $70 million raised by Essence Group Holdings Corp. for its accountable-care software and services subsidiary.
The federal push to promote accountable care received a boost in October when officials overhauled an initial Medicare proposal that many in healthcare rejected (Oct. 24, p. 6). Renewed interest in Medicare’s program for ACOS has added to momentum behind the largely untested payment model in private markets, where commercial insurers, hospitals and medical groups have announced their own efforts.
“You’re really seeing a lot of movement,” thanks to the federal initiative, insurance contracts that shift more financial risk to providers, and mergers and acquisitions between health plans and health systems, said Diane Holder, president and CEO of UPMC Health Plan. “I am not sure where it’s all going,” she said, calling the activity “interesting.”
Accountable care offers hospitals, medical groups and other healthcare providers financial incentives to reach quality and cost-control goals for a group of patients. Under Medicare accountable care, which is scheduled to begin next year, hospitals and doctors can earn a