First posted 9/19/11 on Disease Management Care Blog
Adding to a continuing drumbeat of skepticism about Accountable Care Organizations (ACOs), Gail Wilenksy offers a “sobering” Perspective in the New England Journal about their underlying business model. She draws on the lessons of the Physician Group Practice Demonstration, where – despite “glowing” press releases – the financial savings were decidedly elusive. Summarizing things nicely, Ms. Wilensky points out that only 2 out of the 10 Demo participants were able to achieve savings in the first year of operation and that only half of the group had savings after three years.
Why did this happen? She agrees with many of the criticisms noted by your Disease Management Care Blog: there were some important “design” issues involving the comparator groups (the use of “rural” settings may have set the baseline too low), CMS struggled with providing timely claims data and the risk adjustment methodologies may have fallen short (for example, the Demo participants had high-cost specialty services which may have inflated their cost).
While Ms. Wilensky previously served in a Republican administration, the Disease Management Care Blog has always found her to be a reasonable pundit. That’s why it’s telling that she concludes her paper with a damning observation candy-wrapped in bureaucrat-speak: as currently envisioned, she says, the proposals “seem inconsistent with the hopes that have been pinned to ACOs as a viable alternative to both traditional Medicare and traditional managed care.”
Jaan Sidorov MD writes at Disease Management Care Blog.