Survey: Few ACOs Ready For Financial Risk

Few hospitals interested in becoming accountable care organizations are ready to take on financial risk, according to a survey released Friday from The Commonwealth Fund.

“We’re really still at the very beginning of the adoption curve of the ACO model,” says lead author Anne-Marie Audet, who researches health system quality and efficiency at Commonwealth. “The challenge is that hospitals are still not ready to assume financial risk.”

ACOs are networks of doctors and hospitals that take financial responsibility for managing the health care of a specific group of patients. If the networks lower the overall health care costs of their patients while also improving the quality of their care, they can receive financial rewards.  For example, an ACO might focus on making sure that patients with chronic conditions like diabetes and high blood pressure get the preventive care they need to stay out of the hospital.

There are already 154 ACOs serving nearly 2.4 million Medicare beneficiaries, and dozens more ACOs are involved in partnerships with private insurers. But so far, the majority of ACOs are pursuing models that allow them to share in any savings they achieve without losing money if they fail to cut costs. In other words, there’s a lot of carrot but not much stick.

The Commonwealth Fund report suggests that’s likely to continue, though hospitals are making advances in how they manage patient care. The nationwide survey of nearly 1,700 hospitals measured hospitals’ readiness to participate in ACOs. It was conducted in September 2011, before the federal government released final rules for the Medicare Shared Savings Program. The survey had a response rate of 34 percent.

Thirteen percent of respondents reported that they were either already participating in an ACO, or planning to participate in the next year. Of these, almost three-quarters reported sharing clinical information between care settings, such as the hospital and primary care practices. More than half reported calling patients within 72 hours after discharge to follow up. And nearly 85 percent have information systems to track how patients use health care services.

But only one in five hospitals pursuing an ACO model reported that they were using data to predict which patients were most likely to be in poor health and need more services—a significant gap in their ability to manage risk, says Audet.

“If you want to be able to manage financial risk, you have to be able to determine who in your high-risk population who will need more care-management,” Audet says.

Audet says there might be an upside to the relatively slow start ACOs are having. “In the ’90s, one of the factors that led to the failure of the HMO model was that a lot of organizations were forced to assume financial risks when they weren’t ready,” says Audet.   “That’s an area where we still see gaps, and we need to pay attention to that.”