Otolaryngologists Prepare for the Era of Accountable Care Organizations (ACOs)

The CMS-run Shared Savings Program, which requires a low level of financial risk in exchange for a modest level of shared cost savings, is proving to be an especially popular population health management initiative. In all, several hundred organizations submitted applications to take part in the program’s second and third rounds, which began July 1, 2012, and Jan. 1, 2013, respectively. “We’re pretty happy with where we are with the program,” said John Pilotte, director of the Performance-Based Payment Policy Group in the Center for Medicare.

Last January, another 32 groups joined Medicare’s Pioneer ACO program, designed for more experienced organizations. The groups assume more risk and, in return, are more handsomely rewarded for meeting benchmarks. All told, the tally of confirmed ACOs in the United States reached 449 by mid-March, according to Leavitt Partners, a Salt Lake City-based health care consulting firm tracking the growth of accountable care (see “A Sampling of Major ACO Programs,” p. 22). David Muhlestein, an analyst with Leavitt Partners, said private and public-privage hybrid ACOs now account for roughly half of that total, a trend driven by their ability to experiment with different approaches and more easily track costs through clearly defined patient populations.

ACO participants have varied widely in the effort required to get up to speed. “Some people have said they haven’t had to make any major changes to their organization, while some people have had to drastically rethink how they provide care,” Muhlestein said. In general, many of the former have had the luxury of working within relatively integrated facilities and building upon existing frameworks, whereas many of the latter previously toiled in silos and are now scrambling to establish more cohesive working relationships.

Joane Goodroe, an Atlanta-based health care consultant, said success may require a streamlined strategy that gets an ACO up and running and then allows a provider group to gradually add to it rather than wait until all of the right pieces fall into place. “The execution of the concept is so different than what we have done in health care to date that it’s going to have to be a strategy that is either well-funded or sustainable because they’ve used resources as carefully as possible to maximize where the dollars are spent,” she said.

Integrating Specialists

The Pioneer ACO demonstration has proved a good fit for organizations such as Phoenix-based Banner Health Network, which decided “to transform itself into more of a value-based, performance-based provider,” said Chris Coleman, its chief financial officer. Banner’s ACO, which serves about 50,000 beneficiaries, is still setting up needed systems, including a consistent platform for electronic medical records, and working out how best to integrate specialists into its model. Even during the building phase, however, Coleman said company officials have been pleasantly surprised by the ACO’s positive effect on utilization, patient care and apparent savings.