CMS has conducted and concluded three demonstrations of the ACO (accountable care organization) and all of them have failed dramatically. Running from 2005 to 2010, PGP (Physician Group Practice) Demonstration raised Medicare costs by around 1.2 percent. Further the Pioneer accountable care organization program has cut down the Medicare spending by around four-tenths of a percent on average from 2012 to 2016. Furthermore, the MSSP (Medicare Shared Savings Program) that began in 2012 has raised the Medicare costs by around two-tenths of a percent on average.
Would Accountable Care Organization work by turning them into HMO?
According to the final report on PGP Demonstration, while performance payments contributed to around 1.5% of the claimed amounts, the demonstration saved nearly about 0.3 percent. So the demo ran resulted in a net loss of around 1.2 percent.
Difference between ACOs and HMOs!
Austin Frakt and other claimed that the difference between an ACO and HMO is that the ACO somewhat bear lesser risk than HMO. They even argued that accountable care organization would not bear the total insurance risk and would only be subjected to a lower level of risk sharing, known as ‘shared savings’.
Further some ACO advocates claim that ACOs are more accountable than HMOs largely because of the spread of electronic medical records.
McClellan in support letter also stated that CMS allow ACOs to try to induce attributes so as to attest to their loyalty to an ACO doctor: ‘Results regarding the extent to which patients choose to join an ACO and the potential long-term impact are not yet available, but private-sector programs have had promising results, and increased beneficiary engagement is a fundamental objective for Medicare’.
What David Cutler claimed?
ACO advocate and Obama adviser David Cutler claimed that ACOs would not dictate to patients and doctors what they are allowed to do and even what they cannot as HMOs did!
Moreover only the PGP and Pioneer experiments can be termed as ‘demonstrations’, as the MSSP program was the program that was authorized by the Affordable Care Act (ACA) and is a permanent program as long as the ACA remains law.
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Date: June 12, 2017