ACOs May Lead to Health Insurer Partnerships with Physicians, Hospitals

Joe Cantlupe, for HealthLeaders Media , March 3, 2010

Congress is also looking at ACOs in healthcare pilot projects.

Under the House bill approved in November (HR 3962), provisions are included that call for incentive payment for pilots encouraging ACOs in both Medicare and Medicaid beginning in 2012. The Senate health reform bill allows for providers organized as ACOs that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. These shared savings programs also must have "adequate" participation of primary care physicians, and would also start in 2012.

While the health reform package may not survive intact–ACOs pilot programs are likely to withstand political changes.

Bard and Nugent acknowledge there will be resistance to ACOs, especially among those who believed ACOs would be a reincarnation of the Independent Practice Associations (IPAs) of the early 1990s or the Physician Hospital Organization of the late 1990s, which focused on consolidation and increased market share at the expense of care quality and added value, according to Bard and Nugent.

But they insist that ACOs "offer the greatest potential yet to deliver better quality care more efficiently."

There are cautionary flags out there, however.

One caveat is put forth by one of government's biggest boosters–the Medicare officials. "If there is no financial pressure on providers that choose to stay in the current fee-for-service payment systems, their incentive to take a risk on a new system will be limited–and only providers who expect that they will fare better financially under the new payment method will volunteer," according to MedPAC's report that was released this week stated. "As a result, all other things being equal, voluntary payment reform would increase, not decrease. Steady pressure on unit prices under Medicare's current payment systems, coupled with appropriate redistribution of payments will help address both of these challenges."

So, this leads us all back to the table. Maybe providers, payers, and patients should meet at the next Blair House summit. Mr. President, are you listening?

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Joe Cantlupe is a senior editor with HealthLeaders Media Online.

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