ACO Performance in Focus at Kovner-Behrman Health Forum
The Kovner-Behrman Health Forum, an eagerly anticipated annual event at NYU Wagner, explored the question of whether Accountable Care Organizations (ACOs), a recent reform, are truly spurring cost reductions and greater quality through the coordination of care and the management of patients.
Professor Thomas D'Aunno, Director of the school's Health Policy & Management Program, introduced the guest speaker—J. Michael McWilliams (MD, PhD), the Warren Alpert Associate Professor of Health Care Policy at Harvard Medical School. D'Aunno described him as a path-breaking researcher.
Dr. McWilliams began his talk by noting that ACO's have been described as almost magical, the U.S. healthcare system's "unicorn."
"There's a popular perception of ACOs as a way to get providers to come together, to integrate together, to control the full spectrum of the patient's care, not just a piece of it," he said. It's an approach some say "breeds efficiencies, somehow, that lowers spending and improves quality."
In actuality, ACOs have achieved noteworthy spending reductions. "Our studies suggest that yes, they are modest but they're growing over time." The reductions range from 1 percent to as high as 3 percent, he said.
ACOs have also achieved net savings. Under Medicare, these savings added up to $287 million, or 0.7 percent of total Medicare spending (the equivalent of $67 per patient). By another measure, with spillover benefits layered in, ACOs saved $700 million, or 1.6 percent of total Medicare spending—"a good start," he said.
More patients haven't been kept out of the hospital, even those with serious chronic conditions such as asthma, diabetes, and heart disease, even though reductions in these higher-cost patients had been expected. But then, ACOs were designed to improve access to care, he noted.
Since ACOs managed to reduce healthcare spending—significant in an era of rising costs—how did they do it?
"It turns out that an incredible way to spend less, is to do less stuff," or provide fewer unnecessary or overused services for patients, Dr. McWilliams explained
He also outlined strategies for attaining improved outcomes through the use of ACO's, both on the demand side and the supply side. One, price regulation, will likely be necessary to reduce spending further, he said.
"This is a pretty extraordinary time," the guest speaker summed up. "A lot is going on—things are really changing, and they will continue to change, and all these things will be revisited over and over again. But I do think we have a fairly narrow window of opportunity over the next few years to chart the right course."
The yearly Kovner-Behrman Health Forum was established in 1996 by Anthony R. Kovner, NYU Wagner Professor Emeritus of Public and Health Management. With extensive experience as both a health practitioner and academic, Professor Kovner recognized the value of bridging the gap between the two sectors. The forum offers insights relevant to both practitioners and researchers, with the goal of learning from one another and improving overall health outcomes.
Watch the forum in its entirety below.