With accountable care organizations (ACOs) soon to serve more than a million Medicare patients, it is clear that this model of care delivery is receiving an unprecedented test of its viability, and, if it works as intended, may reshape how healthcare is paid for on a larger scale. Cigna alone plans to have more than a million people enrolled in ACOs by 2014, and says it believes that ACOs are going to be important regardless of the Supreme Court’s ruling on the Patient Protection and Affordable Care Act (PPACA).
With so much focus on the topic, it’s worth taking a look back at some of the research and analysis on ACOs published by Milliman on the topic over the past couple of years.
First, for a good summary of ACOs—what they are and how they work—start with this overview video featuring a number of Milliman experts.
For many observers, the key question about ACOs is whether they represent a financially viable model compared to fee-for-service. Effective financial management will be key to success. Milliman has produced a number of relevant papers:
“ACO Gain/Loss Sharing” proposes a framework for allocating savings within an ACO that emphasizes rewards for an ACO’s component entities based on their relative contributions to the organization’s total shared savings and quality performance. Such a framework is required when applying as a Medicare ACO, but the Centers for Medicare and Medicaid Services (CMS) has not provided a detailed procedure for creating one. This paper tries to help fill that gap.
With all the attention on Medicare ACOs, it’s easy to forget that they exist in the private market, as well. For more on such entities, look at “ACOs Beyond Medicare,” which describes the potential advantages for providers who partner with a private insurer rather than with CMS. A 2011 Managed Healthcare Executive roundtable featuring Milliman consultant Rob Parke also discussed ACOs in the private market.
A number of other papers have also been published discussing various aspects of ACOs such as:
The accountable care organization (ACO) model, like the HMO model, aims to promote provider accountability for care coordination. However, in an ACO, there is no gatekeeper primary care physician (PCP), and members can seek care from any provider they choose. In order to measure provider performance in such a system, members must be assigned to providers via an analysis of healthcare claims. Patient attribution methods that support valid and actionable cost and quality metrics will be crucial to the development of an effective ACO model. A new paper by Susan Pantely looks at patient attribution in ACOs.
The social networking news may be getting the headlines, but the support for e-prescribing may have more immediate benefit. Milliman principal Susan Pantely published an article about the benefits of e-prescribing earlier this year. e-Prescribing has a number of efficiency and quality implications and can enable better access to necessary prescriptions for patients and better management of prescriptions for providers.
A December 2008 study by Milliman, Inc. projects that this cost shifting essentially imposes a surtax of $88.8 billion annually on privately insured patients, increasing their hospital and physician costs by 15 percent. This study concluded that annual health care spending for an average family of four is $1,788 higher than it would be if all payers paid equivalent rates to hospitals and physicians. The transfer of these costs to those with private coverage cannot be sustained and is critical to addressing concerns over affordability.