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The Conestoga Wagons of Accountable Care

December 28, 2011
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Perspectives on the Pioneer ACO Program's Launch

There are many ways to look at the December 19 announcement from the Department of Health and Human Services (HHS) that the Centers for Medicare and Medicaid Services (CMS) had approved the participation of 32 patient care organizations from across the country in Medicare’s new Pioneer Accountable Care Organizations (ACOs) initiative. Being a “glass-half-full” kind of person, I found the announcement broadly positive, despite a few reservations.

Essentially, as HHS’s Dec. 19 press release indicated, the pioneer ACO organizations, whose program will officially begin on Jan. 1, will be given fairly broad leeway as they experiment with various elements of accountable care organization and payment. It seems obvious that the folks at CMS are hoping to stimulate early successes among the 32 pioneer organizations, in order to encourage the leaders of other patient care organizations to participate in the main program.

Now, if one wanted to be a “glass-half-empty” kind of person, one could look skeptically at the development of the pioneer ACOS initiative and note that most of the 32 patient care organizations involved—including, for example, Allina Hospitals & Clinics in Minneapolis; Eastern Maine Healthcare System; Partners Healthcare in Boston; Monarch Healthcare in Orange County, California; Park Nicollet Health Services in Minneapolis; Presbyterian Healthcare Services in Albuquerque; and Sharp Healthcare in San Diego—are already among the most well-known “pioneers” in the U.S. healthcare system when it comes to working in managed care-intense operating environments and participating in pay-for-performance programs, and are already among the most advanced patient care organizations in the country—meaning that there is a good chance they will skate to success under this program.

On the other hand, there are also a number of organizations among the 32 that aren’t particularly famous nationwide, but that have obviously demonstrated to the CMS folks that they’re ready to participate in this initiative.

And regardless of whether they are “name” progressive healthcare organizations or not, all 32 are now participating in a program that offers considerable potential, but also some level of risk. With regard to that, the HHS press release notes that “The 32 Pioneer ACOs underwent a rigorous competitive selection process by the Innovation Center, including extensive review of applications and in-person interviews.” And it goes on to say that “The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth.”

Getting back to my natural glass-half-full impulse, I found the quote in the press release from Marilyn Tavenner, acting administrator of CMS, to be encouraging. She is quoted as saying, “We know that healthcare providers are at different stages in their work to improve care and reduce costs. That’s why,” she says, “we’ve developed a menu of options for Medicare to meet doctors, hospitals, and other healthcare providers where they are, and begin the conversation of how to enhance the care they are offering to people with Medicare.”

What I found heartening in that quotation is the comprehension I inferred in the statement that this accountable care stuff will be difficult and will require maximal flexibility on the part of federal healthcare officials, if they want to achieve strong on-the-ground results. Just a look at the data reporting and clinical IT infrastructure requirements alone is daunting when it comes to developing ACOs. And every member of the c-suite team, including every CIO, in a patient care organization participating in the Medicare shared savings program, will be faced with many challenges.

So, balancing what I would consider both “half-glass-full” and “half-glass-empty” perspectives, it seems clear that the folks at CMS are working hard to encourage some already pioneering organizations to prove their ability to embody success with the accountable care concept, in order to inspire the rest of the industry to get moving. And who can blame them? It’s undeniable that the Medicare program needs all the help it can get to work with providers to find new ways to provide higher-quality, lower-cost care going forward.

In the end, even given the daunting data reporting, EHR-related, care management, physician incentive, and other challenges facing them, it appears that this pioneer program is off to a good start. Only time will tell exactly how this plays out. But I would urge our readers to keep a close eye on these 32 patient care organizations, because the learnings they accumulate should prove valuable to everyone else in healthcare. In any case, as they say, stay tuned.