Will ACOs succeed? There's cause for concern

The performance of accountable care organizations (ACOs) in terms of costs and of care delivered should be monitored closely by policymakers to help them avoid the failures of earlier integrated delivery networks, according to an opinion piece published in the November issue of Health Affairs.

Many of the mechanisms employed by today’s ACOs to reduce healthcare costs and improve healthcare quality were tested by integrated delivery networks in the 1990s, according to Lawton R. Burns, PhD, MBA, and Mark V. Pauly, PhD, both faculty members at the Wharton School of the University of Pennsylvania in Philadelphia.

The push toward integrated delivery networks in the 1990s, however, failed. Hospitals incurred losses stemming from their purchase of physician practices, financial incentives never aligned for all stakeholders and an infrastructure to manage risk was absent, according to Pauly and Burns. While the specifics are different, there is more alike between those networks and ACOs than not, and that gives reason for concern.

“Although the current mechanisms underlying ACOs continue to evolve, whether and how they will have an impact on quality and costs remains open to question,” Burns and Pauly wrote. “Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply.”

Moving forward, there are three things to keep in mind when thinking about ACOs, according to Burns and Pauly. First, keep expectations realistic. ACOs are less likely a “silver bullet” than they are a component of “bronze buckshot,” or a component of a wider array of efforts to improve healthcare. Second, ACOs need to be considering the patient populations most likely to benefit from coordinated care first and foremost. Finally, ACOs need to carefully manage the implementation of payment reforms and quality improvement activities, and providers should focus on change management in the future.

While it’s possible that ACOs show progress in terms of both costs and quality improvement, it’s also possible that they can only accomplish one part of this dual mandate, Burns and Pauly concluded. “With intense financial pressure from Medicare generated by lower Medicare payments, the organizations may be forced to limit costs and, if they cannot do so by ridding their systems of waste, perhaps to do so by achieving fewer quality improvements.”