This morning, several of my colleagues have updated their most recent estimates of the spread and scale of Accountable Care Organizations (ACO) in the Health Affairs blog.
Our new @Health_Affairs blog #ACO Tracking paper is out: https://t.co/6xoYndEpuh For the first time, a year-over-year drop in total ACOs, but still an increase in total lives. The expansion of other value-based payment programs is key. @LeavittPartners @dukemargolis @WillBleser pic.twitter.com/WOx18ommMf
— David Muhlestein (@DavidMuhlestein) October 21, 2019
This year has been eventful for value-based care in the United States. While there has been a total reduction in ACO participants, the number of lives covered under these models has continued to grow. The new ACO program Pathways to Success has been implemented, and dropouts were significantly less than feared, while new organizations moved into the program, even with the enhanced risk requirements. There has also been an increase in the number of physician-led ACOs, and they have moved to downside risk at a slightly higher rate than ACOs with hospitals. Beyond the ACO models, there have also been significant new programs announced which will increase the opportunities for providers to move toward managing the care of populations.
Last week, CMS Adminstrator Seema Verma gave a talk at Duke University on the movement towards alternative payment models such as the ACO program. One of the things that struck me was a statement that CMS was trying to get more ACO like principles into the Exchange program in order to hold down premiums. This was intriguing for two reasons. First, it is a good indicator that the CMS priority is unsubsidized folks and not subsidized folks as lower premiums can often hurt subsidized enrollees. That is not new.
The second, and more important thing that struck me was how to operationalize an ACO in a high churn environment. Medicare and employer sponsored insurance ACOs face a far smaller churn problem. Some categories of eligibility in Medicaid face low churn while other categories of eligibility in Medicaid see high churn. The ACA individual market is a high churn segment
We know that about half the ACA enrollment pool that is signed up on January 1, 2019 will not be signed up for insurance through the Exchange on January 1, 2020. We strongly suspect that there is a differential effect by health status on re-enrollment and continual enrollment. Of the proportion of people who have at least thirteen months of continual enrollment, a decent number of them will be switching insurers. Intra-insurer churn was suppressed in 2018-2019 as monopolies were increasingly common, but more insurers entering and expanding footprints for 2020 will increase intra-insurer churn. Again, we know that this switching behavior is non-random on health factors and demographics. The folks who are continually enrolled in the same insurer for thirteen or more months are highly likely to be a much sicker and older group of beneficiaries than the pool of people who were assigned to an ACO in the first month.
I would not be surprised if prospective assignment led to an primary care physician participating in an ACA ACO model seeing eighty percent of their panel zero or one times during the year. Of the folks that they see once, I would be surprised if they see that person again in the following year. There are some folks who will require intensive case management and coordinated care who are on an ACA plan where the incentives and time horizons for ACOs to pay-off readily line up, but this is a fairly small population.
I am confused at how to operationalize ACOs in a very high churn environment.
jl
Thanks for interesting post on an important topic.
Though, I note the high churn problem again. IMHO, churn caused by the instability of the current regulatory framework for private insurance policies, and the continued insurance company gaming of the dog’s breakfast of metals, which in many places changes from year to year, so that people cannot get consistent coverage from year to year, with reliable relationships with providers, is a serious problem. Part of this was part of compromise needed to get PPACA passed into law. In a better world this would have gradually been fixed. But, we got Trumpster sabotage.
A hidden cost of our health care system is the increased expenditure due to lack of continuity of care, and resulting poorer health outcomes, due to high churn.
Kelly
Incremental changes within our private insurance structure to reduce churn. Start adding to the list of must cover things.
1) A nationwide drug formulary requiring all insurers to cover the same drugs the same way.
2) Nationwide standard treatment codes that all insurers must cover.
jl
@Kelly: I’d add
3) get rid of the gold, silver, bronze, catastrophic coverage plans sold on same market. All insurers public and private must offer absolutely completely uniform basic plan on highly regulate mandatory coverage market. If some people want more coverage, sell supplemental plans on a separate less regulated market. All the current gold and silver competition can go there.
3) Find a way to provide uniform regional pricing, or at least a regional price band
4) no more networks, in-network out-of-network, people have open choice of providers.
That is the kind of market structure that has worked in the Netherlands and Switzerland, if the US goes in direction of Obamacare done right.
The reason I am very sympathetic to Medicare of All plans, from Harris’ version (with highly regulated private insurance along with public Medicare plan) to Bernicare, is that they contain concrete plans to tackle issues that create churn, and lack of access to care, that everyone faces. And incomplete, and surprise, lack of insurance for those who get sick.
The slogans about freedom of choice are misleading, because plans are so unstable, and navigating networks, annual enrollment with constantly changing plans in many areas, that the notion of free choice is illusory. Effective long run multi-year contracts with stable access to providers, and predictable expenses, do not exist in many areas, There is a huge gap in discussion of how to improve Obamacare, it’s just slogans and no concrete plans to solve real and serious problems many people face in current system.
Marcopolo
HI David, thanks for the healthcare posts.
Just dropping by to say this past Friday I received a letter from an ACA navigator offering to help me figure out what to sign up for in 2020. I’ve been getting my healthcare through the ACA since it started and this is a first. I did sign up with a new doctor (same insurer as 2018 but new provider) this year and it appears the navigator is working for their healthcare group SSM Healthcare.
Anyways, it was a nice surprise. I’ll be calling the navigator later today to say I don’t need their help but was happy they were actively working to make it easy for folks to sign up.
Oh, and I have heard nothing, absolutely nothing from the HHS. If I am remembering correctly, by this time in years past I would have started seeing letters or emails from them by now. It is to be expected with their hostility towards all things ACA but ugh.
Brad F
David
What ACO model are you referring to? Commercial ACOs are a hybrid breed, and while researchers define them for the purposes of reviews as “VBP-oid and ACO-like” or something akin to that, they are not by definition what CMS characterizes as risk-based in their MSSP program. The same applies to their other APM models (onc and renal)–commercial side parallel programs are not the same. Not apples to apples
What exchange based ACOs have been proposed beyond hints or suggestions by CMS?
Brad
David Anderson
@Brad F: It was an aside by Ms. Verma during a longer talk about APMs and ACOs @ Duke — mayhe a 15-20 second comment out of a 45 minute session.
Barbara
@Brad F: ACOs are much more prevalent in Medicare than elsewhere. Payers that have tried innovative provider models in the ACA in an effort to mimic what has worked for them in Medicare have mostly given up. It’s a totally different universe of purchaser on the exchanges, one who, mostly, does not yet live their life around the notion that they might need to see a doctor over the next six months. That’s why the unsubsidized are so likely to change from one year to the next.