At a conceptual level, the incentive for ACOs is to increase efficiency and avoid overuse and duplication of services, resources, and facilities. In this model, ACO members (physicians and hospital systems) would share the savings resulting from the coordination and integration of care.
Patients must control their healthcare dollars and be responsible for their care in order to Repair The Healthcare System. Consumers/patients will make sure prices become competitive. Patients in control of their healthcare dollars will not allow duplication of services.
In order to truly Repair The Healthcare System a system of incentives for patients and physicians must be created.
ACOs shift the risk of patient care away from the healthcare insurance industry to physicians and hospital systems.
Most physicians are reluctant to assume accountability for patient outcomes. Physicians recognize that much of the outcome is directly under the patients’ behavior and adherence to recommended therapy.
ACOs remove the consumer/ patient from being responsible or accountable for their medical care. ACOs undermine any attempt to create a truly accountable healthcare system that can drive down costs.
There are also grave uncertainties and practical issues in distributing savings between the hospital system and physicians. There is a long history of hospital systems taking advantage of physicians’ skills and intellectual property.
Many physicians and hospital systems are concerned about the shifting of risk and the lack of control over this risk.
“ The Mayo Clinic announced that the proposed r egulations “conflict with the way it runs its Medicare operations.” Mayo treats about 400,000 Medicare patients a year. The bottom line is that Mayo figured out that they would assume too much risk, lose too much money and relinquish too much control over its processes to the federal government.”
ACOs are really HMOs on steroids. There is too much risk that neither physicians nor hospitals can control. Neither consumers or physicians nor hospital system liked HMOs.
Chart 4: Accountable Care Organizations by State; Source: Leavitt Partners Center for Accountable Care Intelligence
California leads all states with 58 ACOs followed by Florida with 55 and Texas with 44. ACOs are primarily local organizations, with 538 having facilities in only one state.
Chart 5: Accountable Care Organizations by Hospital Referral Region; Source: Leavitt Partners Center for Accountable Care Intelligence
The number of ACOs, again, is of secondary importance to the number of covered lives. Nationally, approximately 6 percent of the population is estimated to be enrolled in an ACO.
Chart 6: Estimated Accountable Care Organization Covered Lives by State; Source: Leavitt Partners Center for Accountable Care Intelligence
Chart 7: Estimated Accountable Care Organization Covered Lives by Hospital Referral Region; Source: Leavitt Partners Center for Accountable Care Intelligence
President Obama and his administration must be living in some fantasy world. It does not matter what the Obama administration is saying adoption of ACOs by physician groups and hospital systems is poor.
The call for forming ACOs started in 2010. The government tried to stimulate the formation of ACOs with sizable grants. It has not worked very well.
Many of the formed ACOs are not functioning in a cost effective manner. In ACOs that are sharing cost saving with the government the fighting between the hospital systems and physicians is just beginning.
Patients in ACOs are starting to feel the dysfunction.
The delivery of medical care under Obamacare and the ACOs are in big trouble.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone