Healthcare Cost & Quality
| May 17 2018

Where's the Real ACO?

Eric Bassett
Senior Partner, Association and Affinity Leader, Mercer

In our 2017 National Survey of Employer –Sponsored Health Plans, we asked employers to rate the importance of strategies they will be using over the next five years to advance the triple aim of lower cost, higher quality, and a better member experience. This post on evaluating ACOs is part of a series that looks at these six key strategies.

Spotting a real ACO among all the pretenders out there can be like trying to find where Waldo is hiding. First of all, what makes a good ACO? In many cases, how well it advances the Triple Aim -- better health, better patient experience and lower per capita cost--serves as the litmus test. But a new twist on the Triple Aim evaluates an ACO's success based on their ability to accept fair compensation for their efforts.

In this context, fair compensation means a two-sided risk model – providers make money when they perform well and lose money when they don’t meet expectations. This research shows that the two-sided risk model generates better results, including improvements in quality of care. It makes sense!

Bottom line, the two-sided risk sharing models saved money for CMS, whereas those with a no-down side risk did not. They also improved quality measures and are starting to create a positive trend in the ACO market. CMS demonstration projects have always been a good laboratory for commercial opportunities.

So, where's Waldo? Look for these three items when trying to spot the real ACOs:

  • They are led by physicians
  • The percentage of practitioners in the ACO with complete access to a patient’s electronic medical record should be near 100% 
  • The payment model incorporates two-sided risk sharing.  

More posts on Key Strategies:

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