Catalyst for Payment Reform

Time to push health plans for the real story on ACOs

Time to push health plans for the real story on ACOs

Fun fact! There are almost 1,000 active accountable care organizations (ACO) across the United States, covering more than 32 million lives (~10 percent of the U.S. population). If you are an employer or health care purchaser, you likely are or will soon be affected by these models, which are expected to continue to proliferate.

ACOs burst onto the scene after the passage of the Affordable Care Act (ACA) in 2010, which stipulated that Medicare would experiment with new ways to deliver and pay for care. ACOs bring together a group of health care providers and hold them accountable for the cost and quality of their patients’ care based on meeting financial and quality performance targets. After Medicare starting piloting ACOs, the commercial sector followed suit by developing ACO arrangements with providers across the country, too.

If success hinged only on the number of ACOs, then we could declare victory.  In 2011, there were 61 ACOs in the United States. Today, there are 923. But what we really care about is whether these models are achieving the desired outcomes.  Reports illustrate that Medicare’s ACOs are generating millions in savings and leading to improvements in health care quality.  Based on these results, we’d want to see more of them, right?

Not so fast. We hear about savings generated and certain metrics moving in the right direction with Medicare’s ACOs, but there’s much more to the story.  You may not know, for example, that the Centers for Medicare and Medicaid Services (CMS) has paid out more to run the program than what it generated in savings. The program reduced spending by nearly $1 billion over three years, but at the same time, CMS paid out about $1.3 billion to these provider organizations.

And what about the commercial sector?  Are results about ACO performance any different?  Employers and other health care purchasers are also having a hard time getting the full story.  The vast majority of purchasers rely on their health plans to answer this question and are finding they only report out on the few measures where performance is strong or improving. Seldom do they provide a comprehensive view—it’s especially rare to see reports on metrics where performance worsened or stayed the same.

The worst part is that ACO performance is impacting employers whether they like it or not. Employers are often charged fees when members of their population are “attributed” to an ACO by their health plan, even if they didn’t purposefully select an ACO strategy.  As the growth of the number of ACO arrangements continues, we need greater transparency into whether they are panning out!

In September 2016, CPR convened a group of seven employer-purchasers frustrated by the lack of transparency into the performance of their health plans’ ACO arrangements. The group worked together to understand how ACOs work, how they should be structured, and which performance metrics best indicate whether these programs produce higher-value care.

This collective effort produced Standardized Plan ACO Reporting for Customers (SPARC). SPARC provides resources for employers and other health care purchasers looking to hold their health plans accountable for the design of their ACO arrangements, their reporting to customers, and especially for the outcomes. The flagship resource is the Standard Plan ACO Report, inspired by the nutrition label, with a carefully selected set of performance metrics. The goal is to make the report an industry standard so that health plans give purchasers what they need—the ability to assess whether these programs are worth the investment, to identify where they need to improve, and to compare health plan ACO programs side-by-side.

The only way that the Report becomes a standard is if employer-purchasers demand it.  Want to join the SPARC movement?  Let us know if we can list your organization or company as committed to asking health plans to use the Standard ACO Plan Report.

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