HPCI News: Accountable Care Organizations (ACOs) and Iowa employers-purchasers
To: Members and Selected Others
Payment of health care providers in Iowa and across the U.S. is moving
from volume-based to value-based. Under this approach doctors, hospitals
and other providers are rewarded for outcomes, not procedures. This
is being developed in various ways. One is the formation of Accountable
Care Organizations (ACOs) which seek to address costs, suboptimal quality
and patient frustration that result from the fragmented delivery system.
An ACO is a local provider entity that is responsible for all the
care health care and related expenditures for a defined population of
patients. The provider entity can take many different forms. Unity Point
Health, The Iowa Clinic, Mercy Health Network, University of Iowa and
Genesis reportedly have or are developing ACOs. There are others in
the works in Iowa as well as in the greater Iowa market area such as
those based in Omaha, Sioux Falls, SE MN and SW WI.
Many Iowa
employers are interested in exploring these new approaches. The Catalyst
for Payment Reform has issued an Action Brief titled “Implementing Accountable
Care Organizations” which spells out a series of steps employers-purchasers
can take. They are the following:
1) Participate in state-level discussions and possible regulatory action regarding ACO development. Give attention to the following issues of employer-purchaser interest:
- Protection against possible monopoly pricing by large ACOs without any meaningful market competition
- Ensuring that provider financial success is contingent, in part, on performance on access and quality measurements to protect against an incentive to undertreat
- Protection of providers against catastrophic financial loss through risk-adjustment of payment and other means
- Support testing and/or use of broad network products (if desired by employer in response to a consumer preference for a broad choice of providers)
- Support for self-insured employer testing of and/or use of ACOs in their networks (if employer is self-insured)
- Ensure full transparency on clinical performance and financial arrangements to ensure accountability
2) Encourage your TPA or insurer contracting with
ACOs to address the aforementioned concerns, and to offer shared-risk
arrangements as appropriate to provide further incentives to providers
to contain costs and improve quality
3) Support
employer coalition and insurer efforts to obtain state support for anti-trust
protection and other means to ensure competitive health care markets,
since provider consolidation to contract on a global basis may result
in monopoly pricing
4) Offer an HMO with a network
provider entity(ies) receiving global payment as an employee option,
as such a network will have significant capability to influence cost
and quality, as evidenced by CalPERS experience in 2010
5)
Anticipate a multi-year transition, and encourage state
government and insurers to jointly monitor the development, implementation
and operation of ACOs to identify opportunities for improvement and
unanticipated consequences, and stay involved
For more information please contact the HPCI office by emailing health@hpci.org.
Paul M. Pietzsch, MPH
HPCI - IHBA Office
4430 Ashley Park Drive
West Des Moines, Iowa 50265
(515) 778-6300