Is The ACO Acceptance Glass Half Full Or Half Empty?
By John Oncea, Editor
One survey reveals hospital executives reluctant to implement ACO models; another says momentum around ACOs is growing. Which one is right?
By John Oncea, editor, Health IT Outcomes
Ken Congdon, editor-in-chief of Health IT Outcomes, asked in June if ACOs were the answer, noting that he “was motivated to write this story in response to the string of bad press ACOs have received in recent months. Many healthcare authorities question the viability of ACOs. While much of this skepticism is valid, some is rooted in the confusion surrounding the ACO concept itself and the ultimate goals of ACOs.”
Congdon doesn’t answer his own question, but he does opine, “ACOs may not survive, but the concept of bringing accountability (for quality of care and cost reduction) to the provider side of the healthcare equation will. If you’re not already doing so, you need to prepare yourself for this inevitability. Health IT will be a key ingredient in this transition. Even if you don’t plan on joining an ACO today, you need to have an infrastructure in place to satisfy care coordination and performance demands.”
It now appears, according to the results of a Purdue Healthcare Advisors survey, that Congdon’s writing “ACOs may not survive” may be prophetic. The non-profit health-care consulting organization found 46 percent of hospital executives have no plans to implement an Accountable Care Organization (ACO)-like model in the near future and executives are struggling with finding solutions for lower reimbursements and increased costs, while still maintaining an acceptable level of quality care.
“This survey has identified a significant need for advocacy and education to support hospitals and help them survive the wave of changes brought on by the Affordable Care Act,” said Mary Anne Sloan, director of Purdue Healthcare Advisors. “Hospital executives are charged with enhancing patient care and managing margins with a shrinking workforce and diminishing patient volumes.”
Healthcare Informatics reports the survey also found, “More than half (of the 206 hospital level executives interviewed) said there were too many unknowns and want to see stronger evidence and a consistency of successful models. Only 20 percent of those surveyed had implemented that kind of model in any capacity. There are additional reasons for the lack of interest. Twenty-six percent of those surveyed say the financial investment of an ACO outweighs the potential incentives or bonuses at this time. Thirteen percent feel the performance benchmarks are not realistic for their hospital.”
Contrasting the Purdue Healthcare Advisors survey to an analysis of not-for-profit hospitals published by Standard & Poor’s Ratings Services, the Indianapolis Business Journal writes, “Even though the new payment models are focused on keeping patients out of the hospital and out of operating rooms, the resulting decline in revenue has forced hospitals to compete more aggressively than ever for every patient.
‘With the often unspoken goal of simply maximizing returns on existing infrastructure for as long as possible, most providers are fighting for every patient, especially on the remaining inpatients in highly profitably service lines,’ the S&P analysts wrote. ‘Heightened competition is expensive, time-consuming, and given the evolving industry and additional expected changes with further implementation of health care reform, potentially counterproductive, demonstrating how hospitals are often caught in a difficult situation with opposing incentives.’
Doug Leonard, president of the Indiana Hospital Association, is quoted by Indianapolis Business Journal as summing up the situation hospitals face by saying, “They’ve got one foot in the boat and one foot on the dock.”
All this contradicts an article published on Modern Healthcare stating, “More than three-quarters of respondents (to Premier's 2013 Economic Outlook ) said they have plans to eventually join the estimated 500 existing ACOs.
“Given the large investments in technology and personnel needed to form an ACO, the Premier survey found that providers most likely to be involved are those that are part of a larger system and located in a non-rural area. Standalone hospitals were most likely to say they have no future plans for an ACO, at 27.4 percent compared with 18.9 percent for hospitals that are part of larger networks.”
Modern Healthcare points to Carilion Clinic, which has both rural and non-rural hospitals and is participating in two ACOs, as a model of how to succeed. “It has 3,000 participants in a shared-savings ACO with Aetna, which was formed in 2011. And in January, it enrolled in the Medicare Shared Savings Program with 46,200 Medicare beneficiaries.
“The centerpiece of Carilion's efforts are the 40 care coordinators who work on improving care transitions and making sure patients remain compliant with their treatment plans. Starting in 2008, it has also invested in a system wide electronic health-record system, a data warehouse and data analytics.
“The efforts have yielded some early successes. Compared with 2011, patients in the Aetna ACO in 2012-13 saw 6 percent fewer inpatient days and had 23 percent fewer avoidable emergency department visits and 10 percent fewer high-tech imaging scans. The ACO reduced its readmission rate to 4.9 percent from 5.6 percent.”
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