Commonwealth Fund: Better infrastructure needed for ACOs
Relating to accountable care organization (ACO) initiatives, providers do not currently have the infrastructure required to take on and manage risk successfully, though some payors are providing infrastructure and other support to providers, according to a July report published by the Commonwealth Fund.
“Providers do not have the data they need about the clinical or financial experience of their patients to manage patient care and financial risk effectively—the HIT structure necessary to coordinate care among providers is at varying levels of implementation,” wrote Suzanne F. Delbanco, PhD, executive director of the Catalyst for Payment Reform (CPR), and colleagues. “Providers also face operational and structural challenges related to the ACO model of care, which demand more coordinated, efficient processes.”
The authors summarized research on ACO shared-risk payment models conducted by CPR and consulting firm Booz Allen Hamilton. The report focused on private sector payment models that meet criteria along provider risk, inclusion of services and incentives of quality.
While multiple ACO efforts were identified, only eight met the report criteria.
“Payor–provider shared-risk models are in an early developmental phase; there are few operational shared-risk models aside from the traditional capitated HMO model,” Delbanco et al found. “It is particularly important to note the very early stage of development of these population-based, shared-risk contracts. We found few operational shared-risk payment models; most are in development or at an early stage of implementation. Of those that are operational, many launched only in the first quarter of 2011 (three of the eight models).”
The authors also found that there are a variety of approaches to shared risk including:
Delbanco and company admitted it is too early to identify which payment models align best for ACOs with high quality care. “Though we did not uncover any existing initiatives that employ one of these payment methods and meet the other research criteria, some initiatives anticipate more aggressive shared-risk payment models in their future.”
The research adds to the current collective understanding of ACO development, and the authors concluded that more opportunities might arise to build upon the experimentation through the Centers for Medicare & Medicaid Services Innovation, as well as the alignment between Medicare and the private sector.
“Providers do not have the data they need about the clinical or financial experience of their patients to manage patient care and financial risk effectively—the HIT structure necessary to coordinate care among providers is at varying levels of implementation,” wrote Suzanne F. Delbanco, PhD, executive director of the Catalyst for Payment Reform (CPR), and colleagues. “Providers also face operational and structural challenges related to the ACO model of care, which demand more coordinated, efficient processes.”
The authors summarized research on ACO shared-risk payment models conducted by CPR and consulting firm Booz Allen Hamilton. The report focused on private sector payment models that meet criteria along provider risk, inclusion of services and incentives of quality.
While multiple ACO efforts were identified, only eight met the report criteria.
“Payor–provider shared-risk models are in an early developmental phase; there are few operational shared-risk models aside from the traditional capitated HMO model,” Delbanco et al found. “It is particularly important to note the very early stage of development of these population-based, shared-risk contracts. We found few operational shared-risk payment models; most are in development or at an early stage of implementation. Of those that are operational, many launched only in the first quarter of 2011 (three of the eight models).”
The authors also found that there are a variety of approaches to shared risk including:
- Bonus Risk Model: Provider is at risk of not receiving a bonus payment based on quality and/or efficiency performance;
- Market Share Risk: Patients are incentivized by lower copays or premiums to select certain providers so providers are at risk of losing market share;
- Risk of Baseline Revenue Loss: Providers face a financial or payment loss if they fail to meet certain cost or quality thresholds, and/or if actual costs exceed a target cost; and
- Financial Risk for Patient Population (Whole or Partial): Providers manage patient treatment costs for all or a designated set of services within a predetermined payment stream and are at risk for costs that exceed payments.
Delbanco and company admitted it is too early to identify which payment models align best for ACOs with high quality care. “Though we did not uncover any existing initiatives that employ one of these payment methods and meet the other research criteria, some initiatives anticipate more aggressive shared-risk payment models in their future.”
The research adds to the current collective understanding of ACO development, and the authors concluded that more opportunities might arise to build upon the experimentation through the Centers for Medicare & Medicaid Services Innovation, as well as the alignment between Medicare and the private sector.