Washington Watch: Deficit reduction politics at play

By Diana Manos
10:49 AM

ACOs are digging in to stay awhile

WASHINGTON –The message was loud and clear at the Third National Accountable Care Organization (ACO) Summit in Washington, D.C., June 6-8. If I had to sum it up, it would be that ACOs are not like the old HMOs of the 1980s. They are backed by advanced healthcare IT this time, and an even greater urgency to make adjustments to the healthcare payment model.

Be they Democrats or Republicans, most people are placing bets on the success of ACOs to bend the cost curve. Republicans may not like the Affordable Care Act's expenditures on establishing pilots to help jump-start ACOs. But, if ACOs succeed in doing what the federal government hopes they will do, non-partisan experts say that ACOs will become a favorite of both parties.

Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services (CMS) in a keynote on June 7 said if it weren't for healthcare reform, the government would not have had the framework and authority to help support the movement toward ACOs. In the past two years, CMS has launched the Pioneer ACO program as well as the Medicare Shared Savings program. Both are fledgling programs, with little data to prove their success so far.

Tavenner said the past two years have been exciting. "It's interesting to see dialogue move from 'change is needed' to 'what type of change is needed?'"

Mark McClellan, MD, director of the Engelberg Center for Health Care Reform, Brookings Institution and former CMS Administrator said, "Since we started doing these conferences three years ago, there has been a huge uptake."

Now, the healthcare industry is dealing with the practical issues of establishing ACOs. "We're much more focused today," he said. "The actual challenges are in large-scale implementation and how to overcome them."

Deficit reduction politics is anticipated to color every decision in Washington, following the election this fall, McClellan said. If the Republicans win the White House and overturn the ACA, the pressure will only go up for them to do something to lower healthcare costs.

"The choices will be not if this will happen, but how well it will happen," McClellan said. There is not much more that can be done to "squeeze down" on Medicare fee-for-service. "Whatever happens, pressure to use ACOs will be bigger than ever," he said of the upcoming election.

If the Supreme Court were to decide in June to revoke all ACA programs, he added, CMS still has existing authority to establish ACOs.