ACOs Show Promise

A critical component of controlling health care costs is moving away from the present fee for service payment structure which promotes unnecessary care in many cases. One proposed solution to FFS payments are Accountable Care Organizations which will provide care for a "pre-paid" fee and also will be rewarded with additional payments if certain quality measures are met. What is the latest with ACOs? According to Mark McClellan, former, CMS head, they show promise:

For the past four years, he said ACO programs have shown improvements in quality and many lead to lower costs. While there are some technical issues that must be addressed, he said, "It seems like a promising foundation for future work," McClellan said.

"One of my first experiences at CMS, I started hearing about integrated provider groups and independent practioners trying to do things to improve quality—like having nurse practioners in disease management, and pharmacists [following up] on medication adherence. They showed me the numbers and these things were actually working. Unfortunately they were getting killed on Medicare reimbursement fees." At that point, CMS embarked on ACO pilot programs, he said.

How well insurers partner with ACOs will be critical for the industry's success in the coming years.