Delivery system reform hampers ACO progress on risk-based contracts

Accountable-care organizations are participating more and more in risk-based contracts, but that progress has been stalled by sluggish care-delivery changes, a new survey suggests.

Roughly 50% of ACOs are involved in at least one downside risk contract, such as shared savings and capitation contracts, according to a Leavitt Partners and National Association of ACOs report recently published in Health Affairs. About 47% of ACOs plan to participate in shared-savings risk-based contracts in the next year or so.

However, ACOs are focusing mostly on "low-hanging fruit" strategies to save money and improve quality of care, which mitigates how well the organizations are able to perform in riskier contracts, the report said.

"Even though ACO providers say they are preparing for and assuming risk, the care delivery system is not advancing as quickly as the payment system reforms," said Kate de Lisle, an author of the study and a senior analyst at Leavitt Partners. "In order for these payment models to be successful, providers need to change the way they deliver care."

Most ACOs still largely focus on "first wave" care delivery changes like readmissions, emergency department use and chronic care management, the report said. ACOs haven't yet tapped into other reforms that will also help them prepare for downside risk like behavioral health integration and medication optimization and management.

Behavioral health and medication management contribute to high healthcare costs, and ACOs farther along in the model have started to address those aspects of care, de Lisle said.

Approximately one-quarter of all ACOs, or 240, responded to the survey. The respondents ranged from urban to rural ACOs as well as physician-led, hospital-led and integrated ACOs.

The survey found that hospital-led ACOs are more likely to have a shared-savings contract with downside risk than a physician-led contract. About 48% of hospital-led ACOs said they currently had a risk-based contract, compared to 28% of physician-led ACOs. Physician-led ACOs might have stalled because they have fewer resources than large systems to secure the capital needed to participate in risk-based contracts, de Lisle said.

"Though the physician-led ACOs have fewer active shared-loss contracts, they are still planning to participate, they are just behind a little bit," she said.

Previous research has even shown that physician-led ACOs are more likely to be successful in the model because they have a deep understanding of their patient populations, she added.

But delivery system reform hasn't kept pace with payment reform. The CMS and other payers haven't offered providers much of a road map for adopting changes to care management. As a result, physicians are trying many different tactics all at once to see what does and doesn't work, de Lisle said.

That hasn't stopped providers with several years of ACO experience from generating savings. A recent study from HHS' Office of Inspector General found the 423 ACOs participating in the CMS' Medicare shared-savings program reduced spending by about $1 billion in three years.

De Lisle encouraged providers to keep working at their ACOs and to not give up. "The longer you are working with these goals and align your system, you begin to figure it out," she said.

The survey also revealed that ACOs spend an average of $1.1 million on care management, and nearly all ACOs — 95% — use care coordinators to help manage their patient population.

"Care coordinators are these Swiss army knife team members that can be used in a number of ways," de Lisle said.

The ACO model is by the far the most popular in the push to value-based care. As of the first quarter of 2017, 923 private and public ACOs were in operation, covering more than 32 million patients, according to a June 2017 post in Health Affairs by Leavitt Partners.

"Because the ACO model has been the primary vehicle in value-based care, I think studying the ACO movement will allow us to better understand where we are on the broader spectrum," de Lisle said.

An​ edited​ version​ of​ this​ story​ can​ also​ be​ found​ in​ Modern​ Healthcare's​ Oct.​ 16​ print​ edition.