Addressing the Exit of the ACO Pioneers

Submitted by on Friday, September 26, 2014 - 01:55

And then there were none….If CMS doesn't heed the warning signs, this will be the headline in Modern Healthcare in a year, reporting on the participation of the ACO Pioneers. And despite the surge in interest in the BPCI, the same headline might also apply to that program in a couple of years. So what's going on? Is it just sour grapes from the losers or something more fundamental? Surveys of physician and hospital leaders about the shift to value-based purchasing indicate that there is a strong belief that the country is moving away from fee-for-service and that most contracts will be risk-bearing in the next few years. Private sector payers and States have also continued their move away from FFS and found providers to be receptive. And finally, mergers and acquisitions are continuing to go full steam ahead, with providers arguing the importance of consolidation to meet the demands of financial risk sharing. As such, the fundamentals seem to point in the same direction, namely the acceptance by hospitals and physicians that payment is changing and that they will have to assume some financial responsibility for the cost and quality of the care they deliver. Of course, for those who have launched into this new sphere of accountability, especially the large health systems now pulling out, a new realism is also setting in: it ain't easy. The promise of EMR data sharing is still just that, and ever elusive. The efficiencies gained in managing patients the right way, including in focused clinics like ChenMed's, is reducing hospitalizations and causing closures, even in the slothiest of markets in the country. And figuring out how to change internal clinician behaviors is daunting in itself.

What this means to you – When we first launched Bridges To Excellence well over a decade ago, we spent a long time interviewing clinicians to figure out how to design a program that would make sense to them as well as the payer. The winning formula is pretty simple and was confirmed in research by Meredith Rosenthal and R. Adams Dudley and published by AHRQ. It boils down to a couple of things: (1) help the provider adequately assess the risks and rewards of participating, and (2) the juice has to be worth the squeeze. And here's where CMS better be paying attention (and perhaps re-reading some of AHRQ's publications), because it's systematically violating rule #1 by changing the formulas, not just in the ACO Pioneer program, but the BPCI as well. That creates significant uncertainty for all participants and can easily flip the scales from sticking with a program to bailing out. Especially when you consider the mounting uncertainty of dealing with the macro shifts to value-based payments, including lower hospital bed occupancy, culture clashes between merged providers, failures of interoperability, and so on. The stunning fact is that no one in the private sector would ever think about constantly shifting terms of a deal because no one would ever do a deal again. But I guess CMS figures providers don't have a choice but to accept whatever it and its contractors dream up. Well they should look at the headline because soon there will be none left accepting those shifty deals. After all, there are alternatives. In the private sector, where all risk arrangements are defined and fixed for the duration of the contract, and in Medicare, by staying in bad old FFS. This isn't rocket science folks, and it isn't sour grapes either; it's basic business sense, but of course that's something that's all too often lacking in federal agencies, and the exit of the Pioneers is simply the latest sign of that crucial deficiency.