What is an ACO?

An ACO (or Accountable Care Organization) is an organization where “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients.

The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.” (cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO)

In West Michigan, examples of ACO’s include the Physician Organization of Michigan ACO & The West Michigan Accountable Care Organization, LLC.

The Centers for Medicare and Medicaid Services (CMS) have set a goal of having 100% of Traditional Medicare beneficiaries in an accountable care relationship with their healthcare provider by 2030.  To that end, in 2023 CMS seeks to advance shared savings payments to certain new ACOs that can be used to support their participation in the Shared Savings Program, including hiring additional staff or addressing social needs of people with Medicare.

Are ACO’s really better?

The answer to this is probably, “depends on who you ask”.  In theory the benefits of an ACO should include:

  • Better care for patients, especially those with chronic disease.
  • Less waste in the Medicare system.
  • Physician-driven treatment.
  • Financial incentives for successful ACOs

Those who question the benefits of an ACO point out some of the following areas of danger.

Capitation – this refers to situations where the money spent on an individual patient is limited to a certain capped amount and while this protects the Organization or Provider from financial ruin for someone with high-cost medical needs or chronic illness, it also puts the patient at risk for decreased care.

Provider Challenges – Critics point to ever increasing compliance requirements on Providers which could potentially make continuation untenable.  In addition, one of the values of an ACO is shared information but for small, personalized physician practitioners, making the investment into secure, compliant technology whereby that communication can be achieved could become too expensive.

Monopolies – Medicine has already been trending to a consolidated model, as witnessed recently by the consolidation of Michigan’s two of Michigan’s largest Medical Providers, Beaumont and Spectrum Health. The new entity, Corewell, now owns 22 hospitals and is Michigan’s largest private employer. Because an ACO must cover, at a minimum, 5000 patients, critics point to the increasing consolidation of care providers who are searching for efficiencies and cost-saving as a dangerous trend that could limit consumer’s choices in regards to care.

What do you think? Do you think ACO’s ensure better care for the consumer or just better profits for the providers?

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