ACOs slow to make progress on risk-based contracts

Most ACOs still largely focus on “first wave” care-delivery changes such as preventing readmissions, emergency department use and chronic care management, according to the report.

While accountable care organizations are gravitating toward risk-based contracts, they are still largely focused on the low-hanging fruit when it comes to saving money and improving quality, according to a new analysis.

Roughly 50% of ACOs are involved in at least one downside risk contract, such as shared savings and capitation contracts, according to a Leavitt Partners and National Association of ACOs report recently published in Health Affairs. About 47% of ACOs plan to participate in shared-savings, risk-based contracts in the next year or so.

“Even though ACO providers say they are preparing for and assuming risk, the care delivery system is not advancing as quickly as the payment system reforms,” said Kate de Lisle, an author of the study and a senior analyst at Leavitt Partners. “In order for these payment models to be successful, providers need to change the way they deliver care.”

Most ACOs still largely focus on “first wave” care-delivery changes such as preventing readmissions, emergency department use and chronic care management, according to the report. ACOs haven’t tapped into other reforms that will also help them prepare for downside risk like behavioral health integration and medication optimization and management.

Approximately one-fourth of all ACOs, or 240, responded to the survey. The respondents ranged from urban to rural ACOs as well as physician-led, hospital-led and integrated ACOs.

About 48% of hospital-led ACOs said they currently had a risk-based contract, compared with 28% of physician-led ACOs. Physician-led ACOs might have stalled because they have fewer resources than large health systems to secure the capital needed to participate in risk-based contracts, de Lisle said.

Previous research has shown that physician-led ACOs are more likely to be successful in the model because they have a deeper understanding of their patient populations, she added.

But delivery system reform hasn’t kept pace with payment reform. The CMS and other payers haven’t offered providers much of a road map for adopting changes to care management. As a result, physicians are trying many different tactics all at once to see what does and doesn’t work, de Lisle said.

That hasn’t stopped providers with several years of ACO experience from generating savings. A recent study from HHS’ Office of Inspector General found that the 423 ACOs participating in the CMS’ Medicare Shared Savings Program reduced spending by about $1 billion in three years.

The ACO model is by the far the most popular in the push to value-based care. As of the first quarter of 2017, 923 private and public ACOs were in operation, covering more than 32 million patients, according to a June 2017 post in Health Affairs by Leavitt Partners.