The value of Accountable Care Organizations (ACOs)

Washington has been touting Accountable Care Organizations (ACOs) as the end-all solution to health care’s woes. Designed to reduce Medicare spending and increase care coordination across a large number of patients, members of an ACO – hospitals, primary care physicians, specialists – would be paid if and when their patient population received outstanding quality of care. However, as the Centers for Medicare and Medicaid Services (CMS) finalize their ACO regulations, many both inside and outside the Beltway are beginning to wonder: Where’s the value?

Although ACOs have been flaunted as the cost containment solution to the government’s burgeoning Medicare spending problem, several organizations – who advocate for the ACOs’ core values of patient-centered, coordinated care – have raised red flags around ACO implementation.The American Hospital Association (AHA) highlighted the extraordinary costs required for systems to implement the ACO model; and a coalition of multi-specialty groups participating in CMS’ Physician Group Practice (PGP) Demonstration Program submitted comments to CMS expressing dismay in the low cost-savings associated with ACOs and their burdensome quality measures. These concerns are joined by others who say the program favors large, urban healthcare providers and that it is simply a rebranding of the unpopular HMO program of the 1990s.

The fact is there is little benefit for hospitals or physicians to join an ACO. Medicare spending may be on the rise, but Medicare patients account for only a small percentage of a provider’s reimbursement. Coupled with a patient’s ability to “opt-out” of participation and thereby undermining the provider’s ability to coordinate care, the ACO program is a flawed one at best. And for Emergency Physicians, who would be deemed unnecessary under the ACO model, there is even more reason to fear how they fit into the proposed system. In fact, emergency physicians could be pivotal in efforts to reduce unnecessary admissions and to improve coordination of hospital and out-patient medical care.

Fortunately, the core values of ACOs are being recognized as important by health plans, healthcare providers and groups of independent physicians who are forming ACO-like organizations for the larger number of commercial patients that focus on value rather than simply on accountability. These are really the Value Care Organizations or VCOs of the future.

Physicians have pushed for the need to improve and better-coordinate care for ages; and since doctors are frequently on the front line when a patient seeks help, it makes sense that they would understand the best course of action for the patient in question – eliminating excess waste along the way and reducing costs to both the provider and the patient. Such a concept takes the coordination of care out of the hands of administrators and back into the hands of doctors and patients. What a truly revolutionary idea!

The idea of a physician-led and health plan supported Value Care Organization, rather than a government sponsored Accountable Care Organization, seems like it could be the real solution to the healthcare crisis.

Ellis Weeker is an emergency physician and contributor to ER Forum.

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