Healthcare's New Bottom Line: Experts Weigh In On Moving ACOs From Theory To Practice

FOR IMMEDIATE RELEASE DECEMBER 18, 2013

Healthcare’s New Bottom Line: Experts Weigh In On Moving ACOs From Theory To Practice

PLAINSBORO, N.J. — Moving healthcare reimbursement from fee-for-service to a system that rewards quality care is easier said than done, but tools are emerging to help the cause. That’s the view of three expert commentators featured in the inaugural issue of The American Journal of Accountable Care, which was unveiled this week by the publishers of The American Journal of Managed Care.

All three commentators — Francois de Brantes MS, MBA; Daniel K. Zismer, PhD and Jon Christianson, PhD -- examined the challenges providers face, as they are being ask to share risk under new contracts with accountable care organizations, or ACOs. These new entities different from the Health Maintenance Organizations (HMOs) of the 1980s in that they may be largely invisible to the consumer. That may be good news for ensuring quality, but in the short term, it could be scary for the balance sheet.

De Brantes, for example, notes that a third of the 32 “Pioneer ACOs,” dropped from the program because the incentives just didn’t work for them. However, he writes, “It would be regrettable to infer from that realization that new payment programs like the Medicare Shared Savings program cannot work. Instead, we should work to better understand the uncertainty embedded in the program and mitigate that as much as possible.”

De Brantes, executive director of the Healthcare Incentives Improvement Institute provides guidance in “Is the Deal Any Good?” which discusses an online calculator that helps emerging accountable care organizations, or ACOs, weigh whether the risk they are bearing in a contract makes sense. De Brantes identifies several variables that help determine this, including the size of the patient population, the target trend rate and the minimum savings rates. For De Brantes’ article, click here.

Zismer, director of MHA and Executive Studies Programs at the University of Minnesota, offers “The 8 Habits Required of US Health Systems” in his article, “Accountable Care Organizations Facing New Competency Challenges.” He describes the changing business relationships this way: “System of healthcare delivery are transformed from manufacturers of units of service sold to sick people on a per unit basis to systems of healthcare accountable for the health status of a population and all related current and future health services needed.” For Zismer’s article, click here.

Among Zismer’s eight habits includes the need to be competent in metrics, benchmarks and ACO performance evaluations. In other words, he writes, figuring out “what counts,” within the context of a contract, presents a huge challenge for some healthcare systems, as few have a template for such the new order. He predicts: “Many health services organizations that accept financial risk for attributed populations will be ‘flying blind.’ “

Christianson, of the University of Minnesota’s Division of Policy Management, School of Public Health,

Is somewhat pessimistic in “Relying on ACOs and TCOC Contracting to ‘Bend the Cost Curve.’ “ A huge challenge, he writes, is finding a good yardstick or “comparison group,” for doctors to use as a benchmark. Past attempts have produced plenty of disputes, he writes, and cost estimates generated through competitive bidding are not always reliable. For Christianson’s article, click here.

The American Journal of Accountable Care, which publishes four times a year, is driven by the stakeholders in healthcare reform. AJAC will offer original research, commentary, conference coverage, and accounts of pilot programs in the most comprehensive overhaul of healthcare reimbursement in our lifetime.

FOR INFORMATION or to SUBMIT ARTICLES: Nicole Beagin (609) 716-7777 x 131

nbeagin@ajmc.com