Blog Post: ACOs: Risks and Rewards Still Unclear by Carolyn Pare, Minnesota Health Action Group President and CEO
Accountable care organizations (ACOs) promise better alignment of health care provider incentives and patient outcomes. But can they revolutionize employer-sponsored health care?
Early Indicators from the Fairview/SEGIP partnership
- You need a strong provider partner.
- The plan administrator may be an important liaison to the negotiated contract.
- Rewards/risks may not match those of existing plan/provider arrangements
- The risk of the incoming population is difficult to predict.
- Reporting requirements are increased for employers.
- Transparency and discretion are important; trust is key.
- Providers and employers are new to the ACO environment. It takes time to learn.
Two-thirds of employers either have or are contemplating ACOs to deliver cost savings, quality improvement, and satisfied patients, according to the 2014 Minnesota Health Action Group Employer Survey. Wanting to learn more about this trend, The Action Group hosted a meeting last week to look more deeply into how one purchaser, the State of Minnesota, has worked with ACO partners Fairview, HealthEast and North Memorial to define and implement its strategy.
Nathan Morocco, the State’s Assistant Commissioner, Department of Human Services, described the foundation of their ACO strategy as helping people make choices based on cost and quality, which leads to lower health care costs and better care management. With over 120,000 covered lives, and a $1.5 billion biennial budget, even single-digit savings are remarkable — and one of our care system panelists confirmed that employers can save up to 10 percent of their health care spend.
Some have said ACOs are essentially health maintenance organizations all over again, but I believe increased access to data means employers, business coalitions, providers, payers and even patients, are better able to assess the quality of care than they were 20 years ago when HMOs became prevalent. Criticisms of HMOs centered on limiting care, but ACOs aren’t about limiting care. They’re about limiting unnecessary treatment that could cause harm and the focus is on delivering high quality, efficient care.
Here are a few highlights of The Action Group’s ACO Event:
- Employers don’t always have direct access to conversations with providers since the health plan is typically their intermediary. Facilitated direct discussions between employers and providers are beneficial in understanding the landscape and may be enlightening to employers.
- ACOs are a work-in-progress, as are the total cost of care contracts that many ACOs operate under with health plans. Purchasers need to dig into the details before signing on the dotted line so there won’t be surprises along the way.
- Typically in an ACO arrangement the entire care system is designated a preferred provider; however, there can be significant variation in the quality of care delivered by the various clinics within the system. It is important for the purchaser to understand not only the utilization metrics for the care system, but also for the clinics within the care system.
- Employees are all asked to select a primary care environment, handing over referral patterns and primary care to one entity. It can be a difficult message to tell employees where they can go…but for a provider to be successful they need a group of employees and dependents who consistently visit them.
- We bombard people with information during open enrollment, which is ultimately not helpful. Ongoing, continuous employee education will be a key to success.
Ultimately, to increase the value and decrease the burden of health care, we need to engage patients differently, bringing health and wellness to people and communities and changing the focus from sick care to population health.
- 10% savings
- 98% employee retention
- #1 in health screenings
- Employers can save up to 10% of health care spend
- ACOs Flourishing in 2014, Study Reports
- Physician-run ACO Scores Big Savings Bonus
- ACOs Make In-roads with Employers