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12/27/2011
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Health Executives Doubtful About ACO Participation

In a survey of senior health executives, a majority express doubt that they will participate in Medicare/ Medicaid ACO program.

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Although the federal government promotes Accountable Care Organizations (ACOs) as a way to reduce healthcare costs and increase the quality and delivery of care, a study from KPMG LLP shows that a majority of senior executives at hospitals, health systems, and insurers are undecided about their organization's participation in the Medicare Shared Savings Program (MSSP), commonly referred to as the Medicare ACO program.

The poll, conducted in November by KPMG Healthcare & Pharmaceutical Institute, Epstein Becker Green, and The JHD Group, relied on the responses of more than 100 hospitals and health system leaders and about 40 insurer leaders polled during a webcast on the implications of the recently released ACO final rules.

The survey showed that among hospital and health system respondents, 57% did not know how the final rules will affect their organization's participation in the MSSP program. Sixteen percent said their position was unchanged and they are still planning to participate, while seven percent said the final rules have moved them to participate. Thirteen percent said their position not to participate remains unchanged.

[ Implementing accountable care poses challenges. See Accountable Care Lives Or Dies On Performance Data. ]

Health insurers also expressed doubt, with half saying they were not sure whether their organization would participate in the MSSP program. Nineteen percent said they now plan to participate after learning about the final rules, and 10% said they still plan to participate and that the final rules had no impact on their decision. Two percent said they do not plan to participate and that the final rules did not affect their decision.

The poll also revealed that close to half of hospital, health system, and insurer respondents said it would take 10 years to achieve real results in coordinated care in the U.S. "I guess it really is going to take that long to get all of the infrastructure and the technology and all the other things in place that need to be in place to bring about true change," Joe Kuehn, partner and KPMG Healthcare financial management leader, told InformationWeek Healthcare.

According to Kuehn, the healthcare delivery organizations are still in the early stages of implementing electronic health records and noted that it will take some time before ACOs begin to fully optimize clinical data by transforming that data into clinical intelligence.

"Once we get to Meaningful Use Stage 3 and get the health information exchanges up and running, we can start using that data to bring about clinical intelligence for predictive modeling and other things that we need to do to really change the way we think about providing health to the populations that we serve as opposed to episodic care delivery," Kuehn said.

The survey showed that 36% of hospital and health system leaders said their understanding of various Centers for Medicare and Medicaid (CMS) programs and their financial implications is advanced or comprehensive, with 55% describing it as competent or decent, and 7% labeling it as weak.

Among health insurers, 26% said their understanding was advanced or comprehensive, 62% said it was competent or decent, and 12% said it was weak.

Kuehn said KPMG's discussions with health executives indicates that CMS' ACO pay-for-performance model is being adopted in the commercial market where payments based on quality and cost-reduction efforts are now beginning to appear in commercial payment arrangements.

According to Brad Benton, KPMG Healthcare's national account leader, the shift to a value-based payment model presents the health industry with a "complex business model and change management discussion."

"What we're really talking about here are basic, open questions about emerging healthcare business models, as well as the velocity and timing regarding transition from legacy fee-for-service reimbursement to fundamental value-based reimbursement, regardless of the payment reform model that they choose," Benton said in a statement.

When are emerging technologies ready for clinical use? In the new issue of InformationWeek Healthcare, find out how three promising innovations--personalized medicine, clinical analytics, and natural language processing--show the trade-offs. Download the issue now. (Free registration required.)

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