ACOs and the big squeeze

James M. Berklan
James M. Berklan

The first time I had to ask an official about accountable care organizations, I slowly stumbled through the 10-syllable phrase as if it wasn't made of real words. Computer spellcheck still can't comprehend the word combination, but “ACO” rolls right off the tongue now and there are clarity efforts at every turn.

Try as researchers and regulars might, however, there's still some head-scratching going on. While the future of value-based purchasing seems secure, what ACOs will look like and how widely they'll be adopted is still up in the air.

There are dozens, if not hundreds, of valiant efforts going on around the country, but finding common threads is a tricky proposition. Heads of associations insightfully rue that nobody knows who's ideally supposed to run ACOs. Those who want “in” — such as skilled nursing operators — currently are the least likely to wield significant power, and it could get worse.

Others, including physician groups — which many analysts believe are best positioned to be the pivot point — seem reluctant to take the lead. Then there are hospitals, which have enough headaches of their own without taking over some other initiative … except not doing so might mean losing control over the purse strings.

Perhaps the most stunning comment I have heard about ACOs this year was from a small group of top analysts agreeing that ACO growth has plateaued and might not expand much more.

There is a clear, upward arc neither of momentum nor successful results.

Earlier this year, for example, balky providers asked the Centers for Medicare & Medicaid Services to offer greater savings opportunities and decreased risks in ACOs.

CMS's original Pioneer program (for elite groups) suffered an embarrassing number of dropouts, falling from 32 organizations five years ago to just 19 a little over a year ago. Most left for a spot in the less-risky Medicare Shared Savings Program, which has hundreds of participants. Then, last fall, CMS doubled down, introducing an even riskier format. Greater potential payoff for members, but also much greater responsibility for those handling their own risks.

Amid all this are anxious studies.

Early adopters fared much better than those starting a year later in MSSP programs, this study revealed. The savings dropped from more than $140 per patient to just $3, as we reported earlier this week.

One can draw the analogy to dieting. It's easy to lose that initial water weight, but then it becomes harder to find ways to keep shedding.

An examination undertaken by the Dartmouth Institute for Health Policy & Clinical Practice, however, expresses optimism — depending on one's point of view. Coordinated care for patients with complex needs was hailed as the big winner. Total spending declined by more than $450 annually per patient among beneficiaries with three or more conditions, compared to just $136 annually among all Medicare patients.

Meanwhile, Medicare ACOs were associated with the following reductions: 1.4% in hospitalizations, 1.4% in acute-care spending, 1.9% in emergency department visits and … 5% in skilled nursing facility spending.

Analysts consider the first three “modest” savings. The fourth — taking away $5 out of every $100 that was paid — should give reason for pause, especially for skilled nursing operators.

Follow James M. Berklan @JimBerklan.

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McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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