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The Potential of Medicare Accountable Care Organizations to Transform the American Health Care Marketplace: Rhetoric and Reality

      In this issue of Mayo Clinic Proceedings, multiple authors (representing leading health care systems from across the United States) address the approach that diverse US health care delivery organizations are employing to simultaneously reduce health care costs and improve health care quality.
      • Mayzell G.
      A physician hospital organization’s approach to clinical integration and accountable care.
      • Porter R.G.
      • Tosto A.P.
      The SSM Health Care approach to achieving “true north”: improving health care quality while reducing costs.
      • Couch C.E.
      Why Baylor Health Care System would like to file for Medicare Shared Savings accountable care organization designation but cannot.
      • Shulkin D.J.
      Building an accountable care organization for all the wrong reasons.
      • Milford C.E.
      • Ferris T.G.
      A modified “golden rule” for health care organizations.
      • Nichols L.M.
      Accountable care organization pathways: diverse but ultimately parallel.
      • Anderson R.D.
      • Aderholdt E.
      • Chenven N.
      • et al.
      Ascension Health partners with Centers for Medicare and Medicaid Services' to provide patient-centered care through the Pioneer Accountable Care Organization model.
      The efforts are interpreted through the lens of the accountable care organization (ACO) component of the final rule for the Medicare Shared Savings Program
      Centers for Medicare & Medicaid Services (CMS), HHS
      Medicare program; Medicare Shared Savings Program: Accountable Care Organizations; final rule.
      under the Patient Protection and Affordable Care Act.
      Donald Berwick, the former administrator of the Centers for Medicare and Medicaid Services (CMS) who launched its ACO program, defined ACOs as “voluntary groups of physicians, hospitals, and other health care providers that are willing to assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to them on the basis of patients' use of primary care services.”
      • Berwick D.M.
      Making good on ACOs' promise—the final rule for the Medicare shared savings program.
      The benefit such organizations receive in exchange for this assumption of risk is that “[i]f an ACO succeeds in both delivering high-quality care or improving care and reducing the cost of that care below what would otherwise have been expected, it will share in the savings it achieves for Medicare.”
      • Berwick D.M.
      Making good on ACOs' promise—the final rule for the Medicare shared savings program.
      To date, CMS has defined 2 mechanisms for ACOs, the Pioneer ACO program and the Medicare Shared Savings Program, the primary differences between which are that the Pioneer model allows the ACO to move more rapidly from a shared savings payment model to a population-based payment model and generally applies a higher level of shared savings and risk.
      Pioneer ACO Model
      Centers for Medicare and Medicaid Innovation Web site.
      The fact that only 32 Pioneer ACOs
      Pioneer Accountable Care Organizaztion Model: General Fact Sheet Centers for Medicare and Medicaid Innovation Web site.
      and 27 first cycle Medicare Shared Savings Program ACOs
      Medicare Shared Savings Program Accountable Care Organizations
      Centers for Medicare and Medicaid Services Web site.
      had participated in the Medicare ACO implementations nationwide by the end of June 2012 (see Figure) indicates that, as national health policy expert Len Nichols suggests in his accompanying commentary, (1) most health care organizations were reluctant to move from fee-for-service to outcomes-based payment models without more protection and support
      • Nichols L.M.
      Accountable care organization pathways: diverse but ultimately parallel.
      and/or (2) most health care delivery organizations across the United States judged that neither the Medicare Shared Savings Program nor the Pioneer ACO model is among their most effective initial strategies for reducing health care costs while improving health care quality. The much larger second cycle of Shared Savings ACOs (89 organizations) that CMS announced on July 9, 2012, might indicate that these perceptions are changing. To shed more light on how heath care delivery organizations have evaluated ACO participation, the Editorial Board of Mayo Clinic Proceedings invited commentaries from several regional health care system leaders, and their responses fell into 3 categories: their organizations either (1) adopted the Pioneer ACO model, (2) adopted the Medicare Shared Savings Program model, or (3) adopted neither.
      Figure thumbnail gr1
      FIGUREWhere the ACOs Are: 32 Pioneer and 27 Shared Savings ACOs as of April 2012.
      Source: © 2012 The Advisory Board Committee. All rights reserved.
      A topic of considerable interest to the long-term success of ACOs is why many health care organizations have declined the opportunity to participate in the Pioneer ACO and Medicare Shared Savings Program. The collection of commentaries in this issue of Mayo Clinic Proceedings, therefore, includes 3 from organizations explaining why they chose not to participate. As described in the commentary of Robert Porter and Amanda Tosto, St Louis–based SSM Health Care had concerns about the lack of beneficiary engagement in the ACO models, the timeline the CMS allowed from announcement of the final rule to the application deadline, and the availability of other marketplace options.
      • Porter R.G.
      • Tosto A.P.
      The SSM Health Care approach to achieving “true north”: improving health care quality while reducing costs.
      Health Choice, from Memphis, Tennessee, had concerns about the consequences of retrospective patient attribution in the Medicare Shared Savings Program model.
      • Mayzell G.
      A physician hospital organization’s approach to clinical integration and accountable care.
      Baylor Health Care System, based in Dallas, Texas, experienced practical barriers to patient enrollment, resulting from the final rule's requirement that patient attribution be based on the physician's tax identification number.
      • Couch C.E.
      Why Baylor Health Care System would like to file for Medicare Shared Savings accountable care organization designation but cannot.
      The concerns identified by all 3 of these health systems, SSM Health Care, Health Choice, and Baylor Health Care System, evolved after initial enthusiasm about the Medicare Shared Savings Program ACO model as a mechanism for accelerating these organizations' efforts to reduce health care costs while improving health care quality. Many other highly regarded health care systems are in similar positions to these organizations, albeit some of them remaining publicly silent on their concerns regarding the Medicare Shared Savings Program.
      On a positive note, Len Nichols observes in his commentary that, while very few health care delivery organizations have decided to be early participants in the Medicare Shared Savings and Pioneer ACO programs, the private sector is moving rapidly to advance ACO-like contracts.
      • Nichols L.M.
      Accountable care organization pathways: diverse but ultimately parallel.
      A recent report by Leavitt Partners identified 221 ACOs stretching across 45 states and Washington DC, with private sector ACOs outnumbering Medicare ACOs 4-to-1.
      • Muhlestein D.
      • Croshaw A.
      • Merrill T.
      • Pena C.
      Growth and Dispersion of Accountable Care Organizations: June 2012 Update.
      That these new incentive alignments are as likely to be led by independent physician groups as by integrated health systems is seen by Nichols as evidence that the vision of value-based reimbursement is spreading beyond areas with highly integrated care to the broader health care system. Such actions provide hope for a future in which economic incentives will no longer be detached from, or even at war with, patients' best interests.
      • Nichols L.M.
      Accountable care organization pathways: diverse but ultimately parallel.
      The US Supreme Court’s decision upholding the constitutionality of the Patient Protection and Affordable Care Act

      Nat'l Fed'n of Indep. Bus. V. Sebelius, 567 U.S. (2012).

      provides some security for the fates of the Medicare ACO programs and the private sector’s parallel initiatives– although political rally cries for repeal of the Act continue to be raised in the build-up to the 2012 election.
      • Friedman E.
      Romney Calls for Obamacare Repeal as ‘Bad Law’.
      Regardless of the ultimate outcome, we should not ignore the current opportunity to learn from these activities and health care organizations’ experiences implementing (or not implementing) them. Such study can inform future national and global economic initiatives aimed at lessening health care costs and waste and improving health care value.

      Supplemental Online Material

      References

        • Mayzell G.
        A physician hospital organization’s approach to clinical integration and accountable care.
        Mayo Clin Proc. 2012; 87: 727-728
        • Porter R.G.
        • Tosto A.P.
        The SSM Health Care approach to achieving “true north”: improving health care quality while reducing costs.
        Mayo Clin Proc. 2012; 87: 729-731
        • Couch C.E.
        Why Baylor Health Care System would like to file for Medicare Shared Savings accountable care organization designation but cannot.
        Mayo Clin Proc. 2012; 87: 723-726
        • Shulkin D.J.
        Building an accountable care organization for all the wrong reasons.
        Mayo Clin Proc. 2012; 87: 721-722
        • Milford C.E.
        • Ferris T.G.
        A modified “golden rule” for health care organizations.
        Mayo Clin Proc. 2012; 87: 717-720
        • Nichols L.M.
        Accountable care organization pathways: diverse but ultimately parallel.
        Mayo Clin Proc. 2012; 87: 710-713
        • Anderson R.D.
        • Aderholdt E.
        • Chenven N.
        • et al.
        Ascension Health partners with Centers for Medicare and Medicaid Services' to provide patient-centered care through the Pioneer Accountable Care Organization model.
        Mayo Clin Proc. 2012; 87: 714-716
        • Centers for Medicare & Medicaid Services (CMS), HHS
        Medicare program; Medicare Shared Savings Program: Accountable Care Organizations; final rule.
        Fed Regist. 2011; 76: 67802-67990
        • Berwick D.M.
        Making good on ACOs' promise—the final rule for the Medicare shared savings program.
        N Engl J Med. 2011; 365: 1753-1756
        • Pioneer ACO Model
        Centers for Medicare and Medicaid Innovation Web site.
        (Accessed May 17, 2012)
      1. Pioneer Accountable Care Organizaztion Model: General Fact Sheet.
        (Updated May 22, 2012. Accessed May 17, 2012)
        • Medicare Shared Savings Program Accountable Care Organizations
        Centers for Medicare and Medicaid Services Web site.
        (Accessed May 17, 2012)
        • Centers for Medicare and Medicaid Services
        Press release: CMS names 89 new Medicare Shared Savings Accountable Care Organizations.
        (Accessed July 9, 2012)
        • Muhlestein D.
        • Croshaw A.
        • Merrill T.
        • Pena C.
        Growth and Dispersion of Accountable Care Organizations: June 2012 Update.
        (Accessed July 6, 2012)
      2. Nat'l Fed'n of Indep. Bus. V. Sebelius, 567 U.S. (2012).

        • Friedman E.
        Romney Calls for Obamacare Repeal as ‘Bad Law’.
        June 28, 2012 (Accessed July 9, 2012)