Cannon states:
Medicare's idea of encouragement is this: If doctors and hospitals invest substantial resources to form an ACO, and better care coordination reduces the amount they bill Medicare, then the ACO will get to keep part of the savings.
"Here's a flash for the policy wonks pushing ACOs," writes industry expert Robert Laszewski. "They only work if the provider gets paid less for the same patient population. Why would they be dumb enough to voluntarily accept that outcome?"
The Mayo Clinic, the Cleveland Clinic and 93 percent of multi-specialty physician groups are not that dumb. In what the Associated Press called an "unusual rebuke," they and other providers that President Obama has hailed as models for his ACO program have refused to participate in it.
Many of the recalcitrant providers gladly participated in a similar program launched by the Bush administration, and this week we learned why: that program failed to produce any significant savings for taxpayers.
They now want Obama's ACO program to cough up more money before they will participate.
As we have argued before this will just drive costs up and transparency down.
CMS has now been pushing many ACO models. CMS states:
The payment models being tested in the first two years of the Pioneer ACO Model are a shared savings payment policy with generally higher levels of shared savings and risk for Pioneer ACOs than levels currently proposed in the Medicare Shared Savings Program. In year three of the program,
participating ACOs that have shown a specified level of savings over the first two years will be eligible to move a substantial portion of their payments to a population-based model. These models of payments will also be flexible to accommodate the specific organizational and market conditions in which Pioneer ACOs work.
The Pioneer ACO Model includes strong patient protections to ensure that patients have access to and receive high quality care. To accomplish this goal, Pioneer ACOs will be expected to improve the health and experience of care for individuals, improve the health of populations, and reduce the rate of growth in health care spending. Participating ACOs will be held financially accountable for the care provided to their aligned beneficiaries. In addition, CMS will publicly report the performance of Pioneer ACOs on quality metrics, including patient experience ratings, on its website.
It will be interesting to see how reality sets in.
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