Will ACOs Pave the Path to Reform?

Accountable care organizations could be the linchpin of successful health care reform, according to experts at a forum last week in San Francisco.

“ACOs only take up seven pages in the uncountable number of pages in the Affordable Care Act but they are at the moment one of the fastest growing and most important elements of reform,” said Wendy Everett, president of NEHI, previously known as the New England Health Institute, which sponsored the July 17 event in San Francisco.

“They’re changing how health care is delivered and paid for in this country,” Everett said, “and they’re a vital and important part of what we’re doing.”

Everett said there are currently about 250 ACOs in the country, “with another 500 new groups that have submitted to be an ACO so far this year,” she said.

That kind of growth, she said, reflects the potential of the quality increases and spending reductions that ACOs can bring.

The working definition of an ACO is a network of doctors, hospitals and other providers that coordinates care and shares responsibility and financial risk.

According to Stephen Shortell, a UC-Berkeley professor emeritus and chair of the Berkeley Forum for Improving the Health Care Delivery System, the state spends about 15% of its money on health care costs, and that number is expected to rise above 17% by 2022.

The Berkeley Forum released a report in February this year, “A New Vision for California’s Healthcare System,” that estimated current cost trends in California health care, and possible savings from the kind of integrated care supported by ACOs, Shortell said.

“By 2022 we want to move away from the fee-for-service system. Secondly, we want to move more people into these integrated systems,” Shortell said. “That will save the state $110 billion over those 10 years.”

The report covered the period from 2013-2022. “More than two-thirds of us receive care in low or moderately integrated systems,” Shortell said. “That has to change.”

Shortell said Californians pay too much for health care, with too little to show for it. ACOs might be able to move the needle in a better direction, he said.

“We’ve gone from a culture of sickness to a culture of care in this country. We have not yet migrated to a culture of health and well-being,” he said. “And I don’t think we will, in this country, until we begin to create markets for health.”

That’s the heart of the ACO model, he said.

“That’s what we’re starting to see in ACO models,” Shortell said, “where they are creating economic incentive to keep people well, to do the kind of work and interventions that are going to keep people well.”

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