Accountable Care Enrollees to Triple by 2020

David Muhlestein of Leavitt Partners predicts that the number of patients enrolled in Accountable Care Organizations (ACOs) will rise from 23.5 million today to 72 million in 2020.F9What is an ACO? I am becoming less sure that it is a meaningful term. I mean, really, are you in favor of unaccountable care?

The term appears to have originated in the federal government, which encouraged providers to create ACOs to improve the quality of care and move away from the Fee-For-Service (FFS) model under which Medicare has traditionally operated.  However, the term is now being used in the commercial and Medicaid market. According to Mr. Muhlestein, only 7.8 million current ACO beneficiaries are enrolled in Medicare ACOs.

I suspect that consultants have just appropriated the term for general use so that they can use the same PowerPoint deck when presenting to state Medicaid bureaucracies, the federal Centers for Medicare & Medicaid Services (CMS), and private health plans.

Mr. Muhelstein describes the results of Medicare ACO’s as “mixed”, which is generous. They really make very little, if any, sense, and NCPA has proposed reforms.

ACOs as currently designed are unlikely to succeed because they rely on a distant and centralized government bureaucracy to determine value. This conceit is about to be further embedded in Medicare if the Senate passes the Boehner-Pelosi-Obama Medicare “doc fix”, which uses a different acronym to describe the same vision.

Comments (2)

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  1. Tom Merrill says:

    Hi John, thanks for taking a look at this topic. I may be biased since this is my sole research focus, but I think this topic is pretty important. I wanted to shared some links here you might find useful:

    What is an ACO? It is a bit nebulous but apart of the Medicare program definition, commercial organizations have really put some meat on the concept. We wrote a white paper on it:

    As to the origins of the ACO concept, it actually preceded the PPACA. Most would attribute the basic tenets to groups like Kaiser, Intermountain and Mayo but a specific group of academics codified them into a “model.” See this link for the story:

    • Thank you for taking the time to comment. I’d also like to point out that Leavitt Partners’ research suggests corroboration with what I have long thought: Many people go around saying that Medicare is the first mover and commercial plans follow. I think it more likely that Medicare is the first “labeller” and commercial plans then might adopt the label. However, commercial plans are where the real innovation occurs.