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July 25, 2011 at 08:00 PM
The government is counting on holding down health care costs by sharing risk with health care providers, but it is not yet clear whether health care providers are ready to share risk.
A team of researchers led by Suzanne Delbanco of Catalyst for Payment Reform (CPR), San Francisco, a think tank funded in part by West Coast employers, writes about the possible challenges facing organizers of the new Medicare “accountable care organization” (ACO) program in a report commissioned by the Commonwealth Fund, New York.
The Centers for Medicare & Medicaid Services (CMS) recently started implementing a section of the Patient Protection and Affordable Care Act of 2010 (PPACA) that requires Medicare
to test whether the ACO concept can help hold down Medicare costs while improving the quality of care.
In an ACO, providers are supposed to join together, either through mergers or alliances, to take financial responsibility for providing and managing care for a whole patient, rather than simply collecting fees for each service rendered.
CMS has proposed setting up a Medicare Shared Savings Program (MSSP) that would establish ACOs that require hospitals, doctors and other providers to meet strict, complicated responsibility requirements.
Any private insurers participating in an ACO also would have to meet strict requirements, such as a 25% cap on health insurer representation on an ACO’s governing body.
In the 1990s, health maintenance organizations and independent practice associations (IPAs) experimented with “capitation arrangements” that paid a flat fee per patient, no matter how sick or healthy the patient was when the contract started, and often ended driving the IPAs out of business.
ACO advocates contend that the new risk-sharing arrangements will use better information technology, better systems for helping patients’ avoid health problems and manage their care, and better risk-management mechanisms.
