When the federal Centers for Medicare and Medicaid Services (CMS) on Oct. 8 released, for the first time, data on the quality and financial performance of organizations participating in the Pioneer ACO (Accountable Care Organization) Program, it certainly was another “glass-half-full-glass-half-empty” kind of situation.
The data that the federal agency published revealed a mixed basket of results. After the first year, financial results showed healthcare spending slowing as much as 7 percent among some ACOs, while accelerating as much as 5 percent for others. In the second year, health spending slowed as much as 5.4 percent among some ACOs in the program, and accelerated as much as 5.6 percent among others. Not surprisingly, eight of the nine ACOs that left the Pioneer program (either going into the regular Medicare Shared Savings Program or dropping out altogether) saw an acceleration in healthcare spending.
As an Advisory Board Company article on the development noted:
- Last year, seven Pioneer ACOs that did not produce savings in the first year of the program switched to the MSSP program, and two left accountable care participation altogether.
- Then in August, another ACO dropped out of the Pioneer program. And in September, three more ACOs dropped out, with two switching to the MSSP, and one dropping out altogether.
The first-year results among all 32 original Pioneer ACOs found rsome successes, with healthcare spending during the first year slowing by about 7 percent as a percentage of the organization’s benchmark, while increasing by up to five percent among others. The ACOs that slowed spending the most in 2012 included:
- The New York City-based Montefiore ACO, which slowed spending by 7.1 percent, for which it received $14 million;
- The Irvine, Calif.-based Monarch HealthCare, which slowed spending by 6.3 percent, for which it received $6.07 million;
- The Indianapolis-based Franciscan Alliance, which slowed spending by 6 percent, for which it received $6.67 million;
- And the San Francisco-Based Brown & Toland Physicians, which slowed spending by 6 percent, for which it received $5.34 million.
Meanwhile, the 2013 results among 20 ACOs in the Pioneer program found that some Pioneer ACOs slowed spending by 5.4 percent last year, while others increased spending by up to 5.6 percent.
Not surprisingly, those organizations dropping out of the Pioneer program included some of those with the least good performance. Plus!/North Texas ACO (Texas Health Resources’ ACO), with an increase of 5.2 percent; JSA Medical Group (St. Petersburg, Fla.), with an increase of 4.5 percent; Physician Health Partners (Denver), with an increase of 4.1 percent; Presbyterian healthcare Services (Albuquerque), with an increase of 2.2 percent; and Sharp Healthcare ACO (San Diego), with an increase of 0.3 percent.
What’s particularly interesting here is not the contrast between those organizations that realized savings in the first two years and those that didn’t; what is interesting is that, ostensibly, there is very little to separate the profiles of members of both groups. Yes, Montefiore, Monarch Health, and Brown & Toland are well-known for their innovation over the past several years; but so are Texas Health Resources, Presbyterian Healthcare Services, and Sharp HealthCare. And Allina Health and Fairview Health Services, scored an exact 0.0, meaning that they neither saved money nor overspent, are both titans of innovation up in the highly competitive, highly advanced Minneapolis-St. Paul healthcare market. What’s more, Park Nicollet Health Services, also active in the same market, overspent by 0.6 percent.
So who’s to say why some organizations are saving more money, and others are not? Furthermore, the clinical outcomes results, which were released at the same time, are so opaque, lacking an interpretive key from CMS, that it’s impossible to know exactly what they mean.
So we’ll need to have the time and opportunity to dig more deeply, over the next two years, to find out from the leaders of all these organizations (including those who’ve taken their organizations out of the Pioneer program) what has really been going on. For the bashers out there of both ACOs and of the Affordable Care Act and healthcare reform more generally, these mixed results after years 1 and 2 of the Pioneer program will be definitive proof that the program isn’t working; for the boosters of the program, they will be proof that it is in fact working. Neither will be strictly correct; instead, we’ll need to collectively sort through more data and more results.
And, from what many who are participating either in the Pioneer ACO Program or in the Medicare Shared Savings program are saying, the leaders at CMS will have to make some adjustments in order to keep those active in both programs still active, and to convince others to join—despite the restrictions built into the legislation that will make it difficult for CMS officials to create greater flexibility. As Jeffrey Canose, M.D., the new system COO at Texas Health Resources, told me last month, “Two primary factors were involved” in THR leaders’ decision to pull out of the Pioneer Program in July 2013, after a year-and-a-half of participation. “One,” he said, “was the way the attribution model was structured; the other was that there were significant restrictions on how we could actually manage the care of the patients attributed to the ACO model. It’s sort of like having a professional football player go on the field with his hands tied behind his back,” Dr. Canose said.
With regard to the restrictions involved, he said that “The essence was that CMS had created the guidelines in a way so that you could not impose any gatekeeping functions on utilization of healthcare services by the beneficiaries you were responsible for managing. You could try to channel them into a narrower network of providers or affect where they received their care. So you could have patients attributed to your system who were getting their care from more expensive outside providers/health systems and there was no way or incentive to get the patients to participate in eliminating waste and redundancy.”
Such considerations are considerable, and CMS officials would do well to listen carefully to the complaints of the leaders whose organizations have left the Pioneer program. If it is too difficult for organizations like Texas Health Resources, Presbyterian Health Services, and three renowned Twin Cities innovators like Allina, Fairview, and Park Nicollet to achieve savings, then perhaps there may be real issues built into the program.
That having been said, we all collectively need to take something of a healthcare innovation “chill pill” here, too. By definition, what the Pioneer ACOs—and indeed, the ACOs involved in the MSSP program and in commercial programs as well—are doing is challenging and transformational. I find myself bristling at the jejune barbs quickly thrown at programs like these by talking heads and naysayers in healthcare, when we are, as the eastern sages would put it, only about one step down the road in a thousand-mile journey when it comes to the new healthcare.
So, when it comes to looking at this “numbers salad” coming out of CMS after two years of the Pioneer ACO program, my advice would be, wait until the “entrée” of data and analysis that will come in the next two years, and then make your decision as to whether the program is “working” or not. After all, Rome wasn’t built in a day, and neither will the new healthcare.