Why ACOs Succeed or Fail

Accountable Care Organizations, designed to fail.

As a result of the Patient Protection and Affordable Care Act, there are now hundreds of Accountable Care Organizations (ACOs) throughout the United States, most of whom (93%) never realize any shared savings for its participants. Why do some ACOs succeed whereas many break-even or fail? Dr. Jon Burroughs summarizes some of the key determinants of success or failure with this important new healthcare delivery model.

The accountable care organization remains a relatively new concept, which means growing pains are inevitable.

However, if you were able to rate those ACO pains on the 1 to 10 scale, is a 7 or higher out of the question? There were 32 original Pioneer ACOs, but they began circling the wagons quickly. Only nine remain today.   

The newest ACOs, the Next Generation version, are also falling at a relatively quick pace. Twenty-one Next Generation ACOs began operating less than a year ago. Three have already dropped out of the program.

Nevertheless, many ACOs that continue to plug along have actually reported considerable savings. In 2014, the Pioneer and Medicare Shared Savings ACOs reported a combined cost savings of $411 million (although fewer than 30 percent of those ACOs qualified for incentive bonuses).

There also appears to be an informal consensus that successful ACOs are more likely to be operated by physician organizations than hospitals.

Aside from issues with organizational flexibility, the simple inability to measure progress and outcomes can also undo an ACO. “They didn’t have the IT infrastructure and knowledge to do accurate reporting and tracking, or know where to pull the data from the electronic medical record and place it in the report,” she said. If providers within an ACO had different EMR systems that could not communicate with each other, that could also exacerbate the problem.

Unrealistic expectations can also doom an ACO.

Where do these ideas originate?

About the CMS Innovation Center

 Innovation Center is currently focused on the following priorities:

• Testing new payment and service delivery models, including Quality Payment ProgramAdvanced Alternative Payment Models
• Evaluating results and advancing best practices
• Engaging a broad range of stakeholders to develop additional models for testing

ACO Programs at CMS

Medicare offers several ACO programs, including:

• Medicare Shared Savings Program (cms.gov) - For fee-for-service beneficiaries
• ACO Investment Model - For Medicare Shared Savings Program ACOs to test pre-paid savings in rural and underserved areas
• Advance Payment ACO Model - For certain eligible providers already in or interested in the Medicare Shared Savings Program
• Comprehensive ESRD Care Initiative - For beneficiaries receiving dialysis services
• Next Generation ACO Model - For ACOs experienced in managing care for populations of patients
• Pioneer ACO Model - Health care organizations and providers already experienced in coordinating care for patients across care settings

At the 24th month of activity many participants of the Pioneer ACO model have withdrawn for a number of reaons.  Each group is designed for a specific group of patients, or group practices already organized into an integrated health system.

A quick view of 

Where Innovation is Happening

This map can shows the Innovation Models run at the State level (in orange) as well as the health care facilities where Innovation Models are being tested (in blue). In the default view of this map, a user should select the Model(s) to display. To create a filtered view, use the check-boxes to select the desired Models to display, and/or use the drop-down menu to go directly to a particular state or to zoom back out to the national view.  All of these ACOs are derived from already functioning integrated health systems.  The ACO allows another layer of bureaucracy for formulating payments (APM) Advanced Payment Models

Model Design Factors

The affordable care act confounded these new innovations, creating unobtainable deadlines, limited financial resources, and a lack of confidence in innovations emanating from CMS and congressional ineptitude. There are no well proven information technology programs designed to analyze, or administer an ACO.  Startup expenses will be high.
In another post Digital Health Space looks at the MD Anderson Center and their experience with health information technology.

EPIC Failure  The risk of financial difficulty is present even in large well funded organizations. In smaller organizations the providers report intense displeasure







Why ACOs Succeed or Fail - Burroughs Healthcare Consulting | Burroughs Healthcare Consulting