Accountable care organizations are a huge topic in healthcare right now. Do they improve quality? Can they lower costs? And, importantly, should spine surgeons join?
Here are 50 things to know about ACOs and where they're headed in the future.
Orthopedic surgeons in ACOs
A Medscape Orthopedist Compensation Report 2014 examines how orthopedic surgeons are interacting with ACOs.
1. 9 percent of orthopedic surgeons are currently participating in ACOs.
2. 13 percent of orthopedic surgeons reported they plan to join ACOs in 2014.
3. The number of orthopedic surgeons participating in ACOs or planning to participate in ACOs grew 6 percent from 2013 to 2014.
4. The Spine Journal published a study examining Medicare payments for episodes of spine surgery. Hospitals in the highest quartile reported episode payments more than twice the amount made to hospitals in the lowest quartile. The highest quartile received $34,171 on average for an episode of care, compared with $15,997 for the lowest quartile.
5. High cost hospitals should focus spinal fusions as well as post-acute care in response to new financial incentives inherent in healthcare reform, the study authors concluded.
6. Total episode payments to hospitals in the highest quartile remained 47 percent higher than the lowest quartile even after risk- and price-adjustment. The average amount paid to these hospitals was $9,210 higher than the lowest quartile.
7. Even after adjusting for the type of procedure chosen — fusions are associated with higher costs — the hospitals in the highest quartile were still 28 percent more expensive than in the lowest quartile. According to the report, procedure choice is a major determinant of total episode payment.
8. Post-acute care use was also different across hospitals. The post-acute care use accounted for the bulk of residual variation in payments across the hospitals.
9. The hospital payments varied similarly after subgroup analyses for the three different procedures. The hospitals in the highest quartile for one procedure were also expensive for the other spinal diagnoses.
Characteristics of physicians in ACOs
According to Jackson Healthcare's annual Physician Practice Trends Survey of 2014, the number of physicians participating in ACOs has increased significantly since the implementation of the Patient Protection and Affordable Care Act in 2012. The physicians involved in ACOs are more likely to:
10. Practice in urban areas (42 percent) and in the Midwest (23 percent).
11. Be younger than 54 years old (54 percent).
12. Report no change in income since 2013 (48 percent).
13. Be on a call rotation (67 percent).
14. Work more than 10 hours per day (65 percent).
15. Use nurse practitioners (46 percent) and physician assistants (38 percent).
16. See patients in a hospital for non-emergency, non-surgical care (51 percent).
17. Describe the outlook for a career in medicine in 2014 is favorable (31 percent) and be likely to encourage a young person to enter the field of medicine (60 percent).
18. Describe their practice as hospital employment (33 percent) or as a single or multi-specialty practice that is owned by a hospital or health system (23 percent).
19. Have never worked in a private practice if they are currently employed by a hospital (50 percent).
Pioneer ACOs improve quality, generate savings
Accountable care organizations participating in the Pioneer program and Medicare Shared Savings Program reduced Medicare spending by $817 million last year, according to CMS. Here are 10 key thoughts from the report:
20. CMS named the original 32 Pioneer ACOs in December 2011, and upon the release of first year performance data in July 2013, nine Pioneers departed from the program. In August 2014, San Diego-based Sharp Healthcare left the Pioneer program, leaving only 22 of the original ACOs in the program.
21. For performance year two, Pioneer ACOs generated estimated total model savings of more than $96 million, and they saved the Medicare Trust Fund approximately $41 million in the second performance year.
22. Eleven of Pioneer ACOs earned shared savings totaling $68 million in performance year two.
23. The mean quality score among Pioneer ACOs increased by 19 percent during performance year two. The mean score was 85.2 in 2013, up from 71.8 percent in 2012.
24. The Pioneer ACOs showed improvement in 28 of the 33 quality measures — including screening for tobacco use and cessation, and controlling high blood pressure — with average improvements of 14.8 percent across all quality measures.
25. The MSSP requires healthcare providers to make a three-year commitment to care for a group of at least 5,000 Medicare beneficiaries.
26. The CMS release included performance year one results for MSSP ACOs with April 2012 and July 2012 start dates.
27. In performance year one, MSSP ACOs held spending to $652 million below their targets and earned more than $300 million as their share of program savings.
28. The MSSP ACOs saved the Medicare Trust Fund approximately $345 million in performance year one.
29. MSSP ACOS improved on 30 of 33 quality measures, including measures on screening for high blood pressure and clinicians' communication, in performance year one.
Should spine surgeons join ACOs?
Nick Shamie, MD, of UCLA Medical Center, discussed whether it's smart for spine surgeons to join ACOs in a Becker's Spine Review article. Here are the key concepts from his report:
30. The ACO is typically hospital-run, which means hospitals control how payment is distributed. Independent physician groups with primary care physicians can also run ACOs and control payment distributions, but it takes a significant critical mass and fewer physician groups have come forward to create ACOs than hospitals.
31. Spine surgeons who are aligned with hospitals could benefit from the new ACO payment structures, especially in busy, competitive markets in large cities where hospitals are purchasing physician practices.
32. A group of spine surgeons is more powerful than a single provider trying to navigate and negotiate ACO participation. Specialists are allowed to participate in more than one ACO.
33. The quality you provide will become critically important in the ACO. Unless you are confident in your ability to select the appropriate patients and deliver quality care, joining the ACO may not be beneficial.
34. Payers are aligning with the big medical centers — in ACOs or other types of agreements — so the medical centers will become a vital part of any surgeon's practice. The most advantageous alignments will be hypoethical situations to predict future possibilities for the agreement.
35. Spine surgeons participating in ACOs will ramp-up data collection beyond the basics to focus on quality care, patient satisfaction, wait time for visits and the type of care provided. They'll need extra resources to ensure the most convenient patient care is delivered.
ACOs are growing
Here are a few recent accountable care organization announcements and how the total number is growing across the United States.
36. Blue Cross Blue Shield of Illinois announced earlier this year it plans to have 16 ACOs by 2015.
37. Bethlehem, Pa.-based St. Luke's University Health Network and Capital BlueCross entered into an accountable care agreement, with an aim at improving patient health outcomes and patient satisfaction while reducing healthcare costs.
38. Englewood, Colo.-based Centura Health and Colorado Health Neighborhoods — Centura's physician provider network — are collaborating with health insurer UnitedHealthcare to launch an ACO aimed at improving the quality of care and reducing healthcare costs for nearly 17,000 UnitedHealthcare members in Colorado.
39. Irvine, Calif.-based St. Joseph Hoag Health and Orange, Calif.-based Children's Hospital of Orange County are forming an ACO.
40. Raleigh, N.C.-based WakeMed Key Community Care, an ACO, and Blue Cross and Blue Shield of North Carolina signed an accountable care agreement.
41. Des Moines, Iowa-based UnityPoint Health Partners — an ACO created through collaboration between UnityPoint Health in Des Moines and approximately 2,500 independent and employed physicians — and UnitedHealthcare are partnering with an aim of improving the quality of care for more than 36,000 UnitedHealthcare members.
42. Chicago-based Presence Health Partners entered into an accountable care agreement with Cigna.
43. A recent report from Dallas-based Parks Associates, a market research and consulting company, has found the number of lives covered by accountable care organizations will increase from 40 million in 2015 to over 130 million by 2017.
44. The significant increase in ACO formations will generate a great deal of revenues, as Parks Associates expects ACOs to generate nearly $1 billion in care management revenues this year, according to the release.
45. As of July 2014, there were 272 ACOs in America, with many participating in the Medicare Shared Savings Program.
Antitrust treatment of ACOs
ACOs can raise red flags for antitrust agencies, according to a recent presentation by the Director of the Federal Trade Commission's Bureau of Competition, Deborah L. Feinstein, at the Fifth National ACO Summit in Washington, D.C. Here are five things to know about the antitrust treatment of ACOs:
46. ACOs can present antitrust concerns if they eliminate or reduce price competition or allow providers to gain increased bargaining leverage with payers.
47. Antitrust issues involving ACOs can arise if the integration involved in forming the organization involves a substantial portion of the competing providers of any service or specialty.
48. An ACO that does not obstruct the functioning of a competitive market will be deemed lawful and in compliance with antitrust laws. For example, if there are meaningful alternatives for patients and payers when considering network options it is likely antitrust issues will not arise.
49. Meaningful alternatives are provided to consumers when there are competing providers available that are not affiliated with the ACO, or where healthcare providers participating in the ACO are non-exclusive and able to contract directly with payers or participate in other ACOs.
50. There are four design features of ACOs that raise red flags for the antitrust agencies:
• Preventing payers from steering patients to certain providers;
• Tying sales of the ACO's services to the private payer's purchase of other services from providers outside the ACO;
• Requiring healthcare providers to enter into exclusive agreements with the ACO that prevent them from contracting with outside payers;
• Restricting a payer's ability information on cost, quality, efficiency and performance available to enrollees.