The Evolution of Accountable Care Organizations
They’ve been called “the most popular yet least understood shorthand of 2011.” But Accountable Care Organizations, or ACOs, are coming to a city near you. At least we
think so.
A little background: The concept of the ACO grew out of the landmark Dartmouth Atlas Project, a 30-year study of the relationship between health care costs and quality. Researchers from Dartmouth found that there was a great deal of variance in quality across the country, and that one of the reasons for this was a lack of coordination between health care providers in a given area. ACOs, therefore, were conceived as a way to formalize the relationship between acute care hospitals and physicians in surrounding areas to both improve the quality of care and help manage the costs that can arise from a lack of coordination, such as redundant or unnecessary tests or poor disease management.
(For a thorough overview of the history of ACOs to this point, check out this post from
Health Reform Watch.)
Most experts agree on what an ACO is supposed to be. According to the Centers for Medicare and Medicaid Services (CMS), an ACO is defined as “an organization of health care providers that agrees to be accountable for the quality, cost, and overall care” of their shared patients. These ACOs would, therefore, share the financial risks and rewards of jointly managing the overall health of a patient. In other words, this is a major departure
from the traditional fee-for-service model—it’s pay-for-performance writ large.
But while CMS will begin recognizing and reimbursing ACOs with a minimum of 5,000 Medicare beneficiaries in January 2012, a definitive standard is yet to emerge. NPR’s
Jenny Gold has likened ACOs to a unicorn—everyone seems to know what it looks like,
but nobody’s actually seen one.
According to a HealthLeaders survey of over 1500 health care administrators, 74% of respondents said that they either already have the components in place to be considered an ACO or that they expect to within the next five years. However, when asked to clarify, only 16% of administrators said that they are ready now, with the rest hoping to get there sometime before 2016.
So what is the role of pharmaceutical companies in all of this? It’s still evolving, but many are beginning to realize that their sales and marketing strategies will need to take these new payer models into account. The opportunity for pharmaceutical companies and other medical suppliers is to partner with health care providers and identify how they can help improve the coordination of care and contribute to health care quality, however it is defined.
In the coming months, we’ll be looking for examples of this collaboration and feature them here at Innovating Health.
