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Full Speed Ahead for Accountable Care

With the President’s re-election, the concepts embodied in the Affordable Care Act will pick up steam. One of those is the Accountable Care Organization (ACO) model. ACOs are voluntary organizations that focus on coordination for patients across care settings, including doctors’ offices, hospitals, and long-term care; the coordination is made “accountable” through payment models that reward quality and share (potentially) both up-side and down-side risk. While the ACA enabled ACOs specifically for Medicare, this vision of coordinated, accountable care is being used for all populations and a variety of payers. So this seems like an opportune time to share some information and observations about ACOs—both nationally and within our state.

First, here’s a press release from the Medical Group Management Association; their latest survey of physician practices indicates that physicians are reluctant to participate in the ACO models coming from the federal government (Pioneer, Medicare Shared Savings Program) because of uncertainty about future Medicare payments if the sustainable growth rate isn’t fixed. (It’s important to read the survey questions, however – this was something of a “push” poll, and virtually all the questions were about physician reactions to looming Medicare payment cuts.)

Contrast the MGMA survey results with a report released this past summer showing 221 ACOs operational nationwide. While hospital-sponsored ACOs are still the dominant model, the greatest growth has been in physician-driven ACOs. Of course, that’s to be expected, given the timing of the Pioneer and MSSP applications over the last 12 months. Nonetheless, it’s an instructive development – demonstrating, perhaps, physicians seeking to take more control of their future and illustrating the shift in focus toward primary care.

Another good resource is the National Academy for State Health Policy (NASHP), which tracks states with accountable care models and has developed an ‘Accountable Care’ Activity Map. It’s also instructive to note how hospitals seem to be viewing ACOs. An August 2012 report from the Commonwealth Fund shows that ¾ of hospital respondents said they weren’t even looking at becoming an ACO. Note that the survey to which they were responding was administered in Sept. 2011, before the final Medicare ACO regulations were published; it’s likely that results would differ today. Hospitals seem to be responding to the changing health care landscape with both horizontal consolidation and vertical integration – and even if they’re not yet calling the latter an ACO, that integration certainly provides a foundation for creating an ACO.

In addition to Medicare- and provider-sponsored ACOs, CIVHC is also tracking activity (nationwide and within Colorado) among the commercial payers. Not only are payers rolling out accountable care models – in many states (not yet Colorado) we’re seeing them purchasing physician practices. Again, vertical integration can facilitate the coordination ACOs are intended to provide.

It’s important to recognize that the definition of an ACO has gotten more elastic. As originally conceived by Elliott Fisher and colleagues, ACOs would include both shared savings and risk. In recognition of market realities and the fact that it takes time to transition provider entities to a place where they’re capable of managing risk, most of the ACOs we’re seeing now include only shared savings; some (e.g., Pioneer) include the potential for downside risk in later years, once a participating entity has demonstrated that ability.

Just about all the data quoted above is national. What’s happening in Colorado besides the Medicaid Accountable Care Collaborative and Physician Health Partners’ selection as a Pioneer ACO?

  • Colorado’s Medicaid program has seen impressive initial results from the ACC, which relies primarily on care coordination payments. The state is launching some shared savings components, and in the coming year will experiment with other payment models.
  • Children's Hospital has developed a pediatric ACO in partnership with Physician Health Partners
  • On the commercial payer side, some health plans in Colorado are launching “accountable care” products; what’s the difference between those and the narrow networks of old? And, how are providers and purchasers responding to them?
  • Plenty of hospital systems are purchasing physician practices in order to control their referral sources, but how many of those have built in the “accountable” part of the organization?

As CIVHC monitors these developments and helps to shape them, we also need to consider other questions:

  • How are these developments affecting consumers’ experience and the quality of the care they receive?
  • At what point does vertical integration (between hospitals and physician practices, health plans and providers) become consolidation that actually drives prices up?

What are you seeing in the marketplace? Share your thoughts and observations with us, and we’ll continue to keep you apprised of what we’re seeing and doing in this regard.

About the Author: Edie Sonn is CIVHC's Vice President of Strategic Initiatives. Contact her at

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