Employers want in on ACO discussions

As healthcare providers consider structuring accountable care organizations, the nation's employer community wants to be sure they have a place in those discussions.

That was the message David Lansky, president and CEO of San Francisco-based Pacific Group on Health, gave to providers and other stakeholders Monday in Washington at the second annual ACO Summit co-sponsored by the Engelberg Center for Health Reform at the Brookings Institution and the Dartmouth Institute for Health Policy and Clinical Practice.

Lansky's group is a not-for-profit business coalition that represents 50 purchasers who spend about $12 billion annually to cover more than 3 million employees, retirees and dependents in California. In a panel discussion, Lansky said employers are “lukewarm” about the ACO concept and are taking a “show me” attitude, so the challenge for providers will be to demonstrate the kinds of performance that employers are hoping these models can produce. In calling for transparency, Lansky said employers will be evaluating the payment methodology of ACOs.

“Not the payment which is used to reward the ACO for its performance, but really what is the internal payment mechanism the ACO is using to drive improvement among its provider network,” Lansky said. “How is it using episodes or payment rewards with the provider community that is wrapped within that ACO to continuously reward care coordination, patient engagement, patient safety?” he added.

Lansky also expressed concerns about provider transparency and whether ACOs will produce cost savings for CMS at the expense of commercial providers. For the former, ACOs should produce provider performance report cards that are shared with employees, and, for the latter, there should be greater transparency around community pricing, Lansky said.

HHS Secretary Kathleen Sebelius offered the summit's keynote speech on Monday, saying that HHS is currently reviewing more than 1,200 comments on the proposed rule that was issued in March.

“We're weighing issues like: how do we balance returning dollars to the Medicare trust fund while giving providers enough incentive to participate; how do we balance the urgency of stabilizing healthcare costs with giving providers enough time to learn and adopt a new model for care delivery; and how do we balance protecting patients while also ensuring that providers are not just overburdened with quality metrics?” Sebelius said. “So I'm confident we can find the appropriate measurement and answer your questions in a way that makes accountable care organizations an appealing model for lots of providers around the country who want to start being rewarded for what they trained to do and what they worked to do their entire professional lives: that's keeping their patients healthy in the first place.”

Jonathan Blum, deputy administrator and director of CMS' Center for Medicare, said the agency has received many comments from physician groups about barriers to start-up capital for ACOs. CMS is hearing similar concerns from hospital systems, Blum said, but he added that hospitals are usually better capitalized than physician-only organizations. Blum said the agency “will listen carefully" and "think about ways to provide assistance.”