The rumors are starting to be heard and the rumblings are starting to be felt. Will there be major financial fallout under accountable care and specifically CMS’s regulatory ACO programs?
At the Accountable Delivery System Institute (ADSI) we’ve had numerous conversations with program participants and colleagues, including industry analysts and other experts. One such analyst, who has spoken with dozens of MSSPs and Pioneer ACOs in detail, says that many of these organizations are falling short of their bonus projections. The ones that are taking on down-side risk are in an even more precarious position. This particular analyst predicted that there will be quite a few spectacular financial failings under CMS ACO contracts. Although we both agreed that likely most of them will have the results carefully controlled from public scrutiny, and may possibly even include CMS intervention – leaving a CMS program landscape that will look better publicly than it likely is in reality.
On the commercial ACO side, the ADSI has hosted many large and strong market payers where the interactive discussion has included early program results ranging from very modest to significant. A few payers are concerned that the results reflect improvements in the efficiency of care processes, rather than accountable care initiatives. A few provider groups shared that most of the accountable care payer contracts offered to them are modestly incremental beyond previous pay-for-performance programs. Given the fact that they have many payers associated with their patient population, the amount of clinical process transformation required across their practice for any one payer slice incentive is not enough in many cases to change behavior substantially without providing some form of collaborative assistance. We have heard this during the rollouts of Patient Centered Medical Homes (PCMHs) over the past several years.
And aren’t these the ACO failure results that highly respected business advisor Clayton Christensen predicted in February 2013 in The Wall Street Journal? We explored a response to this key question in an earlier blog posting, Accountable care 2.0 offers promise of success beyond today’s accountable care 1.0 maturity model.
From our work as practitioners of accountable care over nearly a decade, there are specific attributes of operating successful and results-producing accountable care models, based on transformational vs. incremental policy, people, process, and technology changes. In our white paper Accountable Delivery System Operation (ADSO): Business Process Partnering For Value-Based Care Delivery, we specifically identify the 22 core competencies of accountable care and explore the specific transformational services that are required by both provider and payer entities.
In the paper we assert that the health care industry is positioned to achieve breakthrough improvements in cost reduction and quality of care, due to the opportunities presented by accountable delivery system operation (ADSO) services. However, to fulfill this vision for the industry, successful ADSO services must undergo a transformation. They must emerge with a reinvented, collaborative provider-payer model and new provider and payer services, all driven by the goals of the Triple Aim. Partners offering ADSO services must clearly demonstrate proven, optimized solutions engineered for accountable care. Given the very limited sources of proven accountable care operational expertise in the market to assist in lowering an organization’s risk profile, we finish by outlining what to look for in an ADSO business process partner.
What we are hearing and seeing from the field at this early stage of accountable care is troubling but not unexpected. Executing accountable care incrementally (like any other previous provider or payer service line), and managing populations on spreadsheets (as many ACO program providers admit today), is clearly a path to significant disappointment, at best, and financial losses for some.
Both provider and payer organizations must make systemic changes and investments in transforming their business models to operationalize true accountable care and see return on their investment. The bottom-line for organizations making the shift to value-based care can be borrowed from history: “Do it right, or don’t do it at all.”