Three Reasons Why Small Accountable Care Organizations Can Succeed Under CMS' Proposed Rule

Going for that ACO Risk!

In yesterday's convoluted post (individual versus aggregate HCCs?), the Disease Management Care Blog questioned whether statistical uncertainty as high as 40% for the comparison benchmarks will be enough to make organizations think twice about throwing their hat in the ACO ring.  After all, more than a million dollars in investments will probably be necessary to deal with a huge two-sided insurance risk proposition involving thousands of Medicare beneficiaries.  Toss in a) CMS' track record of bureaucratic inertia, b) its clunky quality demands, c) a short start-up time (6 months after the close of the 60 day comment period?) and   d) having to build the skill sets and resources necessary to care for an attributed population, and maybe Vince Kuraitis over at e-CareManagement has a point: "small" ACOs need not apply.

Readers may think that unhappy conclusion is perfectly in line with the cynical, meanspirited, twattling and eternally skeptical DMCB.  Yet, despite what the spouse says, the DMCB is really a naive softie and its hope springs eternal. It bets plenty of small ACOs will go for this brass ring because they have a good - if not better - chance of succeeding.  The DMCB thinks that's because of they may have advantages in 1) geography, 2) their physicians and 3) access and willingness to use external care management resources.  If two out of these three key success factors are present, the DMCB says the provider organization should think about going for ACO status.

What is it about these three characteristics that translate to ACO success?

1) Geography: Maps like this and graphs like this point to areas in the United States where ACOs can make a significant dent in overutilization.  Yes, the Dartmouth Atlas may have its methodologic problems, but even the DMCB (and many of its physician colleagues) believes there is something to the notion of overuse, especially when it comes to "preference sensitive" care.  Accordingly, even small ACOs that "inhabit" the dark colors of the maps or the high ends of those graphs know that they have a great chance of beating a high baseline, even if there is a 40% chance of a misprojection of utilization and even if CMS neutralizes that further in the course of its risk adjustment!

2) Physicians: Managing unfettered patient expectations is well within the reach of primary care providers and team members of the patient centered medical home if they chose to focus on it.  Docs readily intuit that not all heart patients need a CABG, not all rotator cuffs need surgery and not all symptoms need an expensive MRI. Say what you like about HMOs and capitation, one lesson from the 1990s is that when docs tackle utilization, it works.  ACOs that can harness that intellectual capital will beat the benchmark baseline. In fact, small ACOs with "tight" management structures and physician cultures that understand their local markets will probably do best!

3) Outsourcing:  The fact is that there is plenty of help out there.  The joke is that ACO really stands for "another consulting opportunity," but there are myriad expert organizations that understand risk transfer, dealing with CMS, applying the lessons of managed care and marshaling population-based care management services including identifying patients at greatest risk, applying modern versions of disease and case management and using data to nimbly adjust to changes in clinical and economic trends on a quarterly basis.  Unburdened by the hubris of believing that they can build it all, small ACOs will recognize that they can readily buy high performance consulting and turn-key care management services on an outsourced and cheaper basis.