Sure, Accountable Care Organizations ACOs Can Save Money, But Can They MAKE Money?

ACOs at work.

According to this Bloomberg news release, some of Medicare's Accountable Care Organizations (ACOs) are already achieving cost savings. Mt. Sinai and Coastal Carolina are reducing emergency room visits while Hackensack is reducing costs.

All three institutions are using two key ingredients:

1) information technology-based risk stratification to identify the persons at greatest risk and

 2) dedicated full-time nurses who perform telephonic and in-person outreach, coordinate care and provide patient coaching that, in turn, is tailored to that risk.

To the DMCB, the good news is that ACOs are using the two approaches that define modern-day disease and population health management. That industry's success will be Mt Sinai's, Coastal Carolina's and Hackensack's success.

The bad news is that the news release only addresses half the question: did any savings exceed the institutions' cost of the risk stratification and the nurse-FTEs? If the early answer is no, then avoided ER visits and reduced costs could turn out to be much like Governor Christie's lap band: so far so good but it's still risky and could ultimately be all for naught.

And on an unrelated note, this just-published New England Journal article makes note of "not made in America" health care innovations from overseas that could hold important lessons for the United States. In particular, the authors point out that Germany's DRG hospital payment system includes 30-days of post-discharge care and includes the physician payment. Readmissions within that 30 day window are, with a few exceptions, not covered and physician payment is possible because docs are often employees of the hospitals.

"Interesting!" says the DMCB, but is reminded that Germany is hardly a model for reducing inflationary cost trends.   It also specifically recalls hearing Germany's Minister of Health, Daniel Bahr, express impatience with his country's DRG system just last week. He criticized it for not advancing enough quality in his keynote address at the HauptKongress in Berlin.