First posted 9/29/11 on e-CareManagement Blog
A just released study from Aon Hewitt and Polakoff Boland — 2011 Employer Driven Accountable Care Organizations Survey Report— examines employer attitudes toward ACOs. The report provides useful insights into an area that hasn’t yet received much attention.
A couple tables in particular caught my attention.
(click on the graphic to view a larger version)
Key findings in this table include:
- Hospitals come out lowest (employers are only 30% very/somewhat confident in hospital driven ACOs)
- Large medical groups come out slightly higher (31% very/somewhat confident)
- Involving a health plan significantly increases employer confidence for both hospitals and large physician group ACOs:
- Confidence in a hospital/health plan ACO increases to 48% very/somewhat confident (up from 30% with hospital alone)
- Confidence in a medical group/health plan ACO increases to 53% very/somewhat confident (up from 31% with medical group alone)
- A large percentage (25–26% answered Do Not Know) to all options
Question 10 in the survey provides additional information about employer confidence:
Among the following, who would you prefer to provide you credible information about ACOs? (Answers reflect % ranked 1, 2 or 3)
Insurance broker/consultant — 75%
Health plan — 47%
Medical group — 18%
Hospital — 11%
Here is my initial interpretation of these findings:
- Relatively low confidence in hospitals — does this suggest employer mistrust of putting the fox in charge of the hen house?
- Surprisingly high trust of medical groups — surprising (IMHO) given their relatively low absolute numbers and relatively low visibility to-date. This suggests the continuing potential for large medical groups to be a dark horse success in delivering accountable care.
- Confidence rises significantly when health plans are added to hospital-driven or medical group-driven ACOs. Clearly employers see health plans adding value to accountable care approaches. The next survey should probe the underlying factors driving this perception.
- In contrast, patients and providers have shown low trust of health plans. How will these dynamics play out?
- It’s early. Other questions in the survey that employer awareness of ACOs is moderate; the large percentage of Do Not Know answers suggests opportunities to shape opinions.
More broadly, why is the employer POV important in already confusing accountable care market dynamics?
One of health plans’ initial fears about ACOs was the potential for disintermediation. They were concerned that provider sponsored ACOs could contract directly with employers and cut the health plan out of the equation. While this is still possible, the concern seems increasingly theoretical rather than real. And…if health plans are involved in ACOs or other accountable care models, they will be much better able to protect their interests against disintermediation.
Health plan involvement with ACOs could also minimize antitrust concerns. Health insurers have feared that providers will use ACOs as a means to consolidate market power and raise prices.
Finally, in many regional markets a delicate balance of power exists between health plan and care provider market clout. Employers have the potential to tip this balance of power one way or the other depending on the type/scope of health insurance offering they choose to provide to employees. This gets even more complicated when in 2014 PPACA mandated health insurance exchanges will be available — studies have provided mixed perspectives on whether some employers will choose to forego offering ANY health insurance to employees. Definitely worth watching.
Vince Kuraitis is a health care analyst and attorney based in Boise, ID. He writes at e-CareManagement.