Health executives doubtful about ACO participation (USA)

Leadership in Health Services

ISSN: 1751-1879

Article publication date: 27 April 2012




(2012), "Health executives doubtful about ACO participation (USA)", Leadership in Health Services, Vol. 25 No. 2.



Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

Health executives doubtful about ACO participation (USA)

Article Type: News and views From: Leadership in Health Services, Volume 25, Issue 2

Keywords: Accountable care organisations, Medicare Shared savings programme, Change management

In a survey of senior health executives, a majority express doubt that they will participate in the Medicare/Medicaid ACO program.

Although the federal government promotes accountable care organisations (ACOs) as a way to reduce healthcare costs and increase the quality and delivery of care, a study from KPMG LLP shows that a majority of senior executives at hospitals, health systems, and insurers are undecided about their organisation’s participation in the Medicare Shared Savings Program (MSSP), commonly referred to as the Medicare ACO program.

The poll, by KPMG Healthcare & Pharmaceutical Institute, Epstein Becker Green, and The JHD Group, relied on the responses of more than 100 hospitals and health system leaders and about 40 insurer leaders polled during a webcast on the implications of the recently released ACO final rules.

The survey showed that among hospital and health system respondents, 57 per cent did not know how the final rules will affect their organisation’s participation in the MSSP program. Sixteen per cent said their position was unchanged and they are still planning to participate, while 7 percent said the final rules have moved them to participate. Thirteen per cent said their position not to participate remains unchanged.

Health insurers also expressed doubt, with half saying they were not sure whether their organisation would participate in the MSSP program. Nineteen per cent said they now plan to participate after learning about the final rules, and 10 per cent said they still plan to participate and that the final rules had no impact on their decision. Two per cent said they do not plan to participate and that the final rules did not affect their decision.

The poll also revealed that close to half of hospital, health system, and insurer respondents said it would take ten years to achieve real results in coordinated care in the USA: “I guess it really is going to take that long to get all of the infrastructure and the technology and all the other things in place that need to be in place to bring about true change”, Joe Kuehn, partner and KPMG Healthcare financial management leader, told InformationWeek Healthcare.

According to Kuehn, the healthcare delivery organisations are still in the early stages of implementing electronic health records and noted that it will take some time before ACOs begin to fully optimise clinical data by transforming that data into clinical intelligence.

“Once we get to Meaningful Use Stage 3 and get the health information exchanges up and running, we can start using that data to bring about clinical intelligence for predictive modeling and other things that we need to do to really change the way we think about providing health to the populations that we serve as opposed to episodic care delivery”, Kuehn said.

The survey showed that 36 per cent of hospital and health system leaders said their understanding of various Centers for Medicare and Medicaid (CMS) programs and their financial implications is advanced or comprehensive, with 55 per cent describing it as competent or decent, and 7 per cent labelling it as weak.

Among health insurers, 26 per cent said their understanding was advanced or comprehensive, 62 per cent said it was competent or decent, and 12 per cent said it was weak.

Kuehn said KPMG’s discussions with health executives indicates that CMS’ ACO pay-for-performance model is being adopted in the commercial market, where payments based on quality and cost-reduction efforts are now beginning to appear in commercial payment arrangements.

According to Brad Benton, KPMG Healthcare’s national account leader, the shift to a value-based payment model presents the health industry with a “complex business model and change management discussion”.

“What we’re really talking about here are basic, open questions about emerging healthcare business models, as well as the velocity and timing regarding transition from legacy fee-for-service reimbursement to fundamental value-based reimbursement, regardless of the payment reform model that they choose”, Benton said in a statement.

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