Thoughtful Criticism of the ACO Model

Submitted by hci3-usr on Friday, June 17, 2016 - 06:15

Newtown, CT – June 17, 2016

When one of the most thoughtful proponents of ACOs starts raising an alarm, you know the canary is lying dead in the mines – Earlier this week Mark McClellan opined on MACRA/MIPS and the stunning dearth of APM options available for physicians, in particular specialists.

He and his colleagues make important points about the need to hold the line on what constitutes nominal risk so that moving from the MIPS madness to APMs comes with taking on real financial risk, and it’s now up to the leadership of physician organizations around the country to come up with alternative payment models that will truly engage clinicians to be prudent users of health care resources while delivering great care to patients.

Like many of us, Mark notes that the APMs that have been pushed forward by CMS as advanced APMs have yet to demonstrate real savings, in particular the primary-care focused one. That observation was reinforced this week by a paper in the New England Journal of Medicine on the effects of the Comprehensive Primary Care initiative. The upshot is that participating practices have neither shown savings or significant improvement in quality. While we all agree that transforming an average practice into a high performing one, such as those at ThedaCare, is difficult and takes time, is it appropriate for CMS to essentially force all PCPs into this APM when there is no evidence of success?

Similarly, another paper in the NEJM points to the significant lack of progress made by the more recent entrants into the Medicare ACO program. Again not surprising given that there’s always a bias introduced by early entrants and the second wave is more representative of the average health system, and yet the surprise is that this is the program that CMS deems “advanced” enough.

What this means to you – While providers continue to consolidate under the auspices of “better-care-lower-cost,” there’s no evidence that the consolidation is actually producing any benefit for the consumer. And there’s a lot of evidence that it never has, which is why the Federal Trade Commission is trying to block new health system mergers. Even with the rosiest of tinted lenses it’s difficult to say that these two pilots – the Medicare Shared Savings Program and the Comprehensive Primary Care initiative – have produced stellar results.

On the other hand, some of the Medicare pilots, including the Bundled Payment for Care Improvement, have. And yet CMS has chosen – yes, chosen – to ignore the evidence and continue to push aggressively the nation’s delivery system into what appears to be ineffective models, while blocking participation in the ones that are effective.

Delivery system reform is going to take a long time and is going to require as many innovative payment models as can be tested to figure out what will work under what circumstances. States, private and public sector health plans, as well as employers are innovating and testing models. We don’t know yet which will work, but we have a pretty good idea that if you combine a focus on locus of control, manageable risk and rapid performance feedback, the results are really good.

MACRA is designed to accelerate the transformation of the delivery system to yield far greater value to the American people, and CMS could unleash the innovative forces of the market by simply creating a wide door for APMs, a monitoring system to shut down the ones that aren’t effective, and some policing for those who try to skirt the rules. Instead it has chosen the opposite, purposefully ignoring that the canary is no longer singing.

Francois Sig
Francois de Brantes
Executive Director