What seniors should expect from ACOs

Accountable care organizations could save up to $1.1 billion while improving the quality of care for Medicare beneficiaries

The arrival of the New Year also marked the arrival of one of health reform’s most talked about provisions: the accountable care organization or ACO.

Across the country, 32 hospital systems became a Pioneer ACO in a new health reform program designed to improve quality care to Medicare beneficiaries while keeping costs of care low. Estimated savings to Medicare could be as high as $1.1 billion.

Seniors in those hospital systems received notices on January 1st that they had the opportunity (or not) to participate in one of the Pioneer programs.

ACOs could mean savings for providers

Aside from the Medicare program, who stands to benefit from ACOs? From the point of view of the hospitals and doctors participating in this program, participation is an opportunity to save money by taking better care of people.

The health care systems that are Pioneer ACOs – organizations such as Partners Healthcare in Massachusetts, Banner Health Care in Arizona, Physician Partners in Denver – have a long history of working with the physicians in their area.  But ACOs require that hospitals and doctors figure out how to share payments from Medicare, and if they succeed, they can keep some of those savings.

Figuring out who gets what portion of the payment, though, has not been easy.  How much should the hospital get? The primary care doctor? The specialist?  The Pioneer organizations have figured this out, at least preliminarily, and it will be awhile before we know how well they do.

What ACOs mean for seniors

It’s not all about cost savings, though.  Each of these organizations must show they meet over 30 quality measures as well. And those measures are what hold promise for participating seniors: an opportunity to receive better quality of care.

What specifically would being part of an ACO mean for you as a Medicare beneficiary?

First of all, it is not required that you participate in this program or share your data. In that regard, it is different from managed care organizations that restrict your choice of doctors and hospitals.  You can opt out of an ACO without any penalty and go to any hospital or doctor even if they are not part of the ACO.

If you do participate, however, you might see the following improvements in the way you get your care:

  1. You might have a case manager who is responsible for helping you get appointments, medications, follow doctor instructions, etc.
  2. If you are hospitalized, when you are discharged you won’t just be sent home. The ACO will have every incentive to be sure you don’t get readmitted, so they might send a nurse to your home, check in with you every day by phone, help you get the right medications.
  3. You may have access to better data about your care, perhaps even online appointment scheduling or test results.  Remember that the ACO loses money if they don’t treat you right! And loss of money is a big incentive to do the right thing.

The bottom line is that Medicare has been paying for medical services in the wrong way for years. They have paid doctors to do more – not necessarily the right thing.

This is an experiment that is long overdue, and we can only hope that it will produce the expected results – better quality care at less cost.