ACOs showing payment reform possible

March 25, 2015

According to comments made by Michael Chernew, PhD of the Harvard Medical School at the ACC meeting, the healthcare system must transform its payment methods. ACOs may be a solution to control spending.

“The health care system must transform and payment reform represents one pathway that is rapidly diffusing,” according to Michael Chernew, PhD, of the Harvard Medical School, Department of Health Care Policy, Boston, MA, who spoke about payment reform at the ACC meeting during a session entitled “The Promise and Pitfalls of Payment Reform.”

Chernew highlighted payment reform as one solution to the continual and unsustainable rise in healthcare spending. This reform includes reductions in payments to providers and plans, as well as a movement away from the current fee-for-service payment model to bundled payments by episode and patient (global payment).

Among the range of public strategies for reforming payment, Chernew focused on the trend in growth of Accountable Care Organizations (ACOs) and data showing an estimated total savings of $146.9 million during 2011-2012 in what he called the “pioneer” ACOs. Most of these savings were seen in eight ACOs that saw reductions in spending ranging from $32.58 to $102.21 per beneficiary per month.

In terms of service specific results, he cited data from a 2009 cohort of patients treated through an ACO that showed reductions in cardiac spending by 7% (with big reductions in angioplasty and stents) and imaging by 5.9% (with reductions in the use of magnetic resonance imaging and an increase in standard imaging). For both these services, the reduction in cost was largely the result of savings due to price.

What these reductions highlight is the need to eliminate waste, a goal of the ongoing “Choosing Wisely” campaign which includes a focus on selecting appropriate cardiology services (e.g., no stress cardiac imaging in the first evaluation of patients without cardiac symptoms, no annual stress cardiac imaging as part of routine follow-up in asymptomatic patients or patients undergoing low-risk non-cardiac surgery, and no echocardiology as routine follow-up for mild asymptomatic native valve disease in patients with no change of symptoms).

Chernow also emphasized that ACOs do not have a negative impact on patient experiences, citing data showing that overall care ratings for high-risk patients improved significantly.

Saying the “early results are positive” in showing that ACOs can reduce spending without harming quality, he also said there are many pitfalls to ACO success. For example, he cited data of Medicare ACOs showing that only 66% of ACO beneficiaries were consistently assigned to the same ACO in both 2010 and 2011, and that 8.7% of office visits with primary care providers of ACO beneficiaries and 66.7% of office visits with specialists were outside of the ACO.

Commentary by Dipti Itchhaporia, MD, Past Chair, Board of Governors, American College of Cardiology(ACC), Medical Director of Disease Management for the Jeffrey M. Carlton Heartland Vascular Institute, Hoag Memorial Hospital Presbyterian, Newport Beach, California:

Our healthcare system is changing and is making deliberate changes to slow and reduce unsustainable healthcare spending. It is incrementally moving away from fee-for-service payment toward more value-based payment. One way this is manifesting is by transferring risk to providers through the implementation of patient-centered medical homes and accountable care organizations (ACOs), which are typically primary-care focused. The incentives to get specialists to participate in ACOs are still evolving as the specialty share of the shared savings is typically small and not likely to make up for reduced fee-for-service revenue. The rules for assigning patients to providers can also vary quite a bit depending on the model implemented. Additionally, payment reform has led to changes in the organization of medical practices as infrastructures are created to understand and assume risk, including access to reliable quality, utilization and cost data. The management of chronic disease is changing drastically as care becomes more patient-centered, evidence-driven, and team-based. Even as new payment models evolve, we must all work together to provide quality care to patients by delivering the right care, to the right patient, at the right time, in the right setting, for the right price.