Accountable Care Organizations: Houston (or rather Washington), we have a problem!

by Torsten Bernewitz

During the debate about healthcare reform, institutions like the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare were repeatedly showcased as models for a new health care delivery system dubbed “accountable care organizations” (ACO).

This new approach to delivering health care services rewards doctors and hospitals for providing high-quality care to Medicare beneficiaries while keeping costs down. In March CMS announced that it will allow up to 30 provider organizations to apply for "pioneer ACO" status and join the Shared Savings or Pioneer program this fall.

As it turns out, Mayo, Cleveland, Geisinger and Intermountain - considered the most likely candidates - have declined to apply for the “Pioneer” program. They complained that the draft CMS rules were too burdensome and didn't offer enough incentives.

Other stakeholders, such as the American College of Physicians, the American Academy of Family Physicians, the Medical Group Management Association, the American Medical Group Association, and the American Medical Association, voiced similar concerns.

CMS has not yet published how many health systems applied for the program (the deadline to apply was Aug. 19), but The Advisory Board Company, a hospital consulting firm, estimates based on surveys that between 30 and 50 organizations have applied for the Pioneer program. CMS goal was 30, so in terms of numbers they may be fine, however the composition of the group may be disappointing.
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Torsten Bernewitz is a healthcare industry analyst and management consultant.
He is Managing Principal, Healthcare Insurers and Payers at ZS Associates.

This post is the author’s own and does not necessarily represent ZS Associates’ positions, strategies or opinions.

Contact: torsten.bernewitz@zsassociates.com