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OptiMedium April 2019

News from Integrated Care

Accountable Care Organizations in the US – the case for strong policy: Population health improvement needs a policy shift towards payment for population health  

ACOs USIn 2018 about 10 percent of the US population is now covered by an ACO and the public ACO programs are starting to achieve larger savings. Photo: UnsplashThe latest numbers of the public (CMS - Medicare and Medicaid) and private Accountable Care Organizations (ACO) development in the US show further growth. In 2018 about 10 percent of the US population is now covered by an ACO – the US pendant to our Gesundes Kinzigtal model, striving for better health, better care, and higher cost efficiency. This accounts for an increase of about 6 percent compared to the previous year.[1] In summary, the public ACO programs are starting to achieve larger savings across a larger variety of ACOs. Net program savings exceeded 313 Million $ in 2017 (about 35$ per beneficiary) and quality performance remained high.[2]

Nevertheless, the policy uncertainty caused by the Trump administration has put a small pause on the global value- and population health development in the US and facilitated a “wait and see”-attitude for some providers. In particular, the cancellation of several mandatory bundled pricing programs in favor of voluntary versions[3] as well as the termination of state demonstration programs for Medicaid1 has posed questions about the future of value-based purchasing, just as healthcare providers were beginning to accept it as inevitable.

At the last annual Commonwealth Fund Harkness Fellowship in Health Care Policy and Practice alumni meeting in February organized by the B. Braun Stiftung in Berlin, we also discussed the translation of these developments and the policy context from the US to Germany. The recent developments in the US further highlight the importance of a clear policy message to changing the healthcare system from a volume to a value-based system. CMS had set a new tone for the whole health care market in the US, with its originally communicated target to have 30 percent of Medicare payments tied to quality or value through alternative payment models such as ACOs by the end of 2016, and 50 percent of payments by the end of 2018.[4] This had led to a proliferation of ACOs since their introduction in the 2010 Affordable Care Act (ACA). In the first five years, they rose from zero to over 700 (total public and private ACOs[5]). In the first quarter of 2018 1,011 ACOs have been counted1, but with a less clear policy context in Washington, the momentum is in danger. Germany, Austria or the Netherlands are great negative examples of what such unclear policy messages effectuate: preservation of the status quo and suffocation of innovation leading to suboptimal outcomes for patients and society. That’s why we advocate for explicit policy goals, such as >10 percent of the whole national population shall profit from better health, better care and lower costs through population- and value-based accountable care models until 2025 and >25 percent until 2030. In addition, outcomes of payers and providers need to be put on display. Only if transparency becomes the new normal and population health outcomes are what we pay for, we will achieve sustainable, high-performing healthcare systems. This is as true now as it has been more than 20 years ago, as recently also Magnan and Kindig (2019) highlighted in their “Purchasing Population Health – Revisted” paper.

After a short federal value-based policy pause, US policymakers seem to get back on track. On January 9, 2018, CMS announced the new administrations first alternative payment models. Further value-based program innovations shall follow in July. US healthcare policymakers are forced to introduce change because of the high costs and suboptimal health outcomes. Let’s hope for our healthcare systems that policymakers and payers will proactively take a leap towards a clear value-and population-based policy strategy before they are also forced to do so.

[1] https://www.healthaffairs.org/do/10.1377/hblog20180810.481968/full/

[2] https://www.healthaffairs.org/do/10.1377/hblog20180918.957502/full/

[3] The State of Population Health: Fourth Annual Numerof Survey Report Conducted by Numerof & Associates in collaboration

with David Nash, Dean of the Jefferson College of Population Health, March 2019

[4] http://www.nejm.org/doi/pdf/10.1056/NEJMp1500445

[5] http://healthaffairs.org/blog/2015/03/31/growth-and-dispersion-of-accountable-care-organizations-in-2015-2/