January 07, 2014
To help payers and providers better estimate the likelihood of success for Accountable Care Organizations (ACOs), the Health Care Incentives Improvement Institute (HCI3), a not for profit that develops and tests payment innovation models, and IMPAQ International, a research, evaluation, survey and technical assistance firm, have teamed up to develop an online calculator. The Accountable Care Organization Savings Calculator (ASC) is an online tool designed to help providers and payers understand how chance affects the likelihood that an ACO will be rewarded for savings under an ACO contract.
“Recent research has shown a potential for misclassifying ACOs as ‘winners’ or ‘losers’ given the underlying variability of total costs of care in a patient population,” said Francois de Brantes, executive director for HCI3. “Since ACOs have the ability to transform the U.S. health care landscape and with the stakes high for everyone, it’s important to have confidence in the outcomes. That’s why we worked with IMPAQ to developed this tool and remove some of the uncertainty that exists for payers and providers.”
Established through the Affordable Care Act, ACOs are groups of doctors, hospitals, and other health care providers, who jointly offer coordinated care to their Medicare patients. The goal is to ensure patients get the right care at the right time, while avoiding duplication of services and medical errors. When an ACO delivers high-quality care in a more cost-effective way, it may share in the savings it achieves for the Medicare program. Private sector payers are also implementing this payment model and most of the national health plans have a version with providers in their network.
Jointly developed by HCI3 and IMPAQ, the ASC draws on statistical models published in Medicare & Medicaid Research Review to allow payers and providers to assess the probability that an ACO will be rewarded if it achieves a specific trend rate target (depending on the size of the patient group under management and other terms of the financial contract between the payer and the ACO). The estimates take into consideration the underlying variability of the payer population’s historical total costs of care per member.
“As ACOs continue to evolve and grow, so will the types of contractual relationships between payers and providers,” said Dr. Ines Vigil, managing director of IMPAQ’s Consulting Services team, which developed the calculator as part of the IMPAQ Analytics suite of tools aimed at helping businesses successfully navigate the regulatory and policy landscape. “We are dedicated to helping provide analytic tools like the savings calculator to those interested in understanding the role that chance plays in realizing a shared savings payment – managing and reducing risk in a way that maximizes the reward.”
Some of the issues associated with the different types of ACO contracts between payers and providers were recently addressed in an article published in the inaugural issue of The American Journal of Accountable Care. In that article, entitled “Is the Deal Any Good?,” de Brantes offers advice to each party as they decide how to distribute the financial risk inherent in such contracts.
About Health Care Incentives Improvement Institute™, Inc.
The Health Care Incentives Improvement Institute, Inc. (HCI3®) is a not-for-profit multi-stakeholder umbrella organization for Bridges to Excellence® and PROMETHEUS Payment®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system. www.HCI3.org
About IMPAQ International
IMPAQ International is a public policy research firm specializing in designing and implementing rigorous research studies and evaluations of government programs and demonstrations. IMPAQ’s mission is to provide exemplary research and consulting services to its domestic and international clients through the use of impact evaluation studies, applied research, policy analysis, quantitative and qualitative data analysis, and technical assistance.