Leading the value-based care conversation

HealthEC Blog: It’s Too Early for ACO Pathways to Success

risk meter

When it comes to the proposed "Pathways to Success" for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), my suggestion is this: Don’t throw the baby out with the bathwater.

That is, the MSSP is a first-step program that should be a no-risk learning session to assist ACOs adapting to population health management and the value-based contracting environment. There is no need to accelerate their risk exposure this early in the game. Providers still need time to adapt to a new healthcare delivery model, and CMS efforts to speed the process along, as proposed, could be counterproductive.

Yes, most ACOs participating in the MSSP have stuck with one-sided models, but pushing them to two-sided models is asking too much right now because the transition depends on what they learned from access to all the data for the population attributed under the shared savings model.

Further, the ACOs that paid no attention to the data and simply used it to change operations are left playing on an uneven playing field.

The commercial insurers that offer ACO contracts under value-based agreements have decades of experience developing risk strategies. Most payers aren’t really taking on risk because they hedge their bets by buying patient-level, stop-loss policies as they reinsure each patient and pass along the real risk to a re-insurer.

Some large hospital systems already have developed risk-management strategies, but the idea behind value-based care was to move these capabilities down to the provider level, where it’s the physicians that can actually impact care and change behavior as well as keeping control of costs.

Without this expertise in risk mitigation, ACOs don’t have the same opportunities as the larger players in the industry. Payers have experience pursuing hospital and health system preferred contracting strategies. ACOs don’t. And the result is going to be no change in utilization spending behavior patterns.

And while it’s a developmental step or two away from babies and bathwater, ACOs are likely to fall out of the value-based sandbox by being forced to assume more risk. ACO providers haven’t had time to understand the contracting and the risk mitigation process and will now no longer have a platform to develop the important skills required for assuming risk. And just like kids in the sandbox don’t like to share their toys with other children, insurance companies don’t want to share risk with ACOs that don’t already have strategies in place to ensure success at the provider level.

So, what’s the answer?

CMS should take a step back, recognize that most providers are simply not prepared to assume more risk at this time, and give risk-based care more time to develop holistically. While accelerating risk might look good on paper, it could be disastrous for providers who lack risk-management experience.

Sanjay Seth
Author: Sanjay Seth
Date of Publishing : 12/18/18 9:22 AM
About the Author : Sanjay Seth, is executive vice president at HealthEC. With over 30 years of clinical, administrative and consulting experience, Dr.Seth is uniquely positioned to develop population health management strategies that support healthcare providers and organizations.
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