Wednesday, July 6, 2011

Insights on ACOs

Healthcare spending is projected to nearly double in the next 10 years from $2.5 million in 2009 to $4.5 trillion in 2019 according to Mark McClellan, MD, PhD, Director, Engelberg Center for Health Care Reform at Brookings. He addressed the Joint Plenary Session of the “Accountable Care Organization Summit” held in conjunction with the “Health IT and Delivery System Transformation Summit” on June 27-28, 2011 in Washington D.C.

According to Dr. McClellan, there are a wide variety of possible models for ACO implementation that may include:

• Integrated Delivery Systems with one or more hospitals and a large group of employed physicians
• Multi-specialty Group Practices with physician leadership contracting with multiple health plans
• Physician-Hospital Organizations that can be a joint venture between one or more hospitals and physician groups
• Independent Practice Associations where small physician practices work together as a corporation, partnership, professional corporation, or foundation
• Regional Collaboratives consisting of independent or small providers where leadership may come from providers, medical foundations, non-profit entities, or state governments

He explained that ACO implementation will require ACOs to use and invest in health IT to enable data-driven decision making. Care management programs will need to be established to allow teams of nurses, pharmacists and other health professionals do their jobs while preventing costly complications from chronic diseases.

Dr. McClellan pointed out that ACOs need to coordinate care across clinicians and other sites of care, and at the same time, create an effective governance and leadership structure. Most importantly, there is the need for new payment models that will require aligning performance measures and reform priorities.

The Brookings-Dartmouth ACO pilot sites provide support for five sites with support from CMS, private payers, and states. The pilots include Norton Healthcare, HealthCare Partners Medical Group, TMC Healthcare, Monarch HealthCare, and Carillion Clinic.

The Brookings-Dartmouth project has initiated an Accountable Care Organization Learning Network at This resource was set up to provide information on ACOs and help those that have already begun to implement an ACO but also needs to develop the process to improve care delivery, secure ongoing commitments, develop realistic estimates of ACO start-up costs, and build on successes.

Dr. McClellan discussed the Federal government’s part in establishing ACOs. CMS is establishing their Medicare Shared Savings Program (MSSP) to help providers to improve the quality of care and reduce costs for Medicare Fee for Services (FFS) beneficiaries. Since the program was announced, CMS has received over 1,200 comments on the proposed MSSP rule. Brookings has recommended that the program increase early rewards relative to costs.

The CMS Innovation Center recently announced that their ACO Pioneer Model demonstration available to 30 organizations would help to take the next step to produce role models. The organizations selected would need to be experienced in coordinating care and able to transition from a FFS structure to a population-based payment system. Letters of intent were due June 30th and applications from organizations that wish to take part in the demonstration are due August 19, 2011.

For more information on the Summit, go to