On Sep. 17, the federal Centers for Medicare & Medicaid Services (CMS) announced that accountable care organizations (ACOs) participating in both the Pioneer ACO Program and the regular Medicare Shared Savings Program (MSSP) have so far generated more than $372 million in total program savings, while at the same time qualifying for shared savings payments of $445 million. The announcement came after CMS officials had studied the results of the efforts of the 23 Pioneer ACOs after two years of participation, and of the 220 MSSP ACOs, after one full year of participation.
What’s more, Pioneer ACOs showed improvements in 28 of the 33 quality measures involved in that program, and experienced average improvements of 14.8 percent across all quality measures, while MSSP ACOs improved on 30 of 33 quality measures in that program.
Those results were clearly positive for CMS officials, and many found them to be strong. Some industry observers, though, say it’s important to take a deeper dive and to look carefully at what’s transpiring in the ACO programs, before coming to any firm conclusions. Among those is Tom Cassels, executive director, research and insights, at The Advisory Board Company (Washington, D.C.).
In a press release published the same day as the CMS announcement, Cassels said, “These results tell me that the ACOs with clarity of strategic purpose are winning. But,” he added, “the financial return required from providers to achieve these savings is not viable."
Also in that press release, Cassels made the following points:
- On Pioneer ACOs: The improved performance on beneficiary experience of care "meets my expectations," Cassels said. Many Pioneer ACOs have focused winning trust and engagement with their practices.
- On Medicare Shared Savings Program ACOs: According to Cassels, the strongest shared-savings program performers continue to be ACOs that have "shrunk to reliability." Or to put it more simply, Cassels notes that at these top ACOs, "high-performing physicians and practices are celebrated and low-performing participating practices drop out."
- On whether these programs will succeed: Almost one-third of Pioneer ACOs have left the program since it launched two years ago, and many Medicare Shared Savings Program ACOs have been concerned about the program's restrictions. However, Advisory Board experts say there's a deeper tension at play. "The acid test for me is not whether the ACO program survives," Cassels said. "But whether it's creating momentum for providers to organize and act differently, and if that will keep extending into the industry."
The next day, Cassels spoke with HCI Editor-in-Chief Mark Hagland about this important subject. Below are excerpts from their interview.
There have been naysayers and doubters all along. Do these results quash the naysaying, or do they only slightly dampen the naysaying?
The only important naysayers in my mind are Medicare beneficiaries who continue to choose wide-open, passive Medicare FFS versus these coordinated care programs. There will always be naysayers when there are big changes in Medicare. And FFS definitely creates winners and losers. And the ACO program creates a third category, which is organizations that are already low-cost, and are fighting against a benchmark that doesn’t reward them. So you have the conservative group, the transformational change agents, and then you have the high-value, low-upside coalition.
Let’s think about this from the perspective of Sharp HealthCare, one of the pioneers that moved out of the Pioneer program. They didn’t move out because the feasibility of delivering appropriate-cost, high-quality care was not part of their DNA or because that model was not desirable to enrollees. They moved out because the actual viability of the financial model of shared savings is not shared sustainable for them. What is sustainable is a robust Medicare Advantage program.
So they’re betting on Medicare Advantage as their vehicle?
Yes. It’s a better product than ACOs. There are limitations on what ACOs, whether Pioneer or MSSP, can do, how they can engage with beneficiaries—and really, the most important limitation is that beneficiaries don’t know that they’re making a choice. And it is very difficult to have a truly effective health benefit management program when beneficiaries aren’t a key part of the care team. And I haven’t come across a single ACO program that doesn’t yearn to get the beneficiaries more identifiable, to choose them, and …
Are the results announced yesterday about what you had expected?
The report yesterday is a very narrow picture of results, and largely from the perspective of CMS. If you are organizing a group of clinically integrated physicians to deliver a truly different service to beneficiaries, only two beneficiaries matter. One, are more beneficiaries choosing you this year than last year, and are the beneficiaries that chose us last year choosing to re-up? The actual income results released yesterday, taken in the context of the total Medicare revenue for these organizations, these are small numbers, and none of the providers expected them to do any better. What they’re really focused on is whether beneficiaries are enrolling and re-enrolling.
And we don’t know that, yet, right?