Nearly half of hospital executives—46 percent—say they have no plans to implement an accountable care organization (ACO) or similar value-based model in the near future.
ACOs are groups of doctors, hospitals, and other health-care providers that come together voluntarily to provide coordinated care to Medicare patients. The Centers for Medicare & Medicaid Services (CMS) evaluates ACO quality performance using 33 quality measures on patient and caregiver experience of care, care coordination and patient safety, appropriate use of preventive health services, and improved care for at-risk populations. Medicare rewards the ACO when it saves money by delivering high-quality care and avoiding unnecessary duplication of services and preventing medical errors.
Purdue Healthcare Advisors surveyed 206 hospital executives at the director level or higher during October 2013 to explore the use of ACOs and electronic health records (EHRs), as well as the financial concerns of hospitals to comply with changes initiated by the Affordable Care Act.
Health care professionals—not always keen on embracing change—have some understandable concerns moving to the new payment system. Purdue’s study reveals that among those surveyed, ACOs are still seen as risky by many hospital CEOs who participated in the surveyed.
The executives who do not have plans to implement an ACO model in the future (46 percent) cited the following reasons:
- 52 percent stated there are still too many unknowns—they desire stronger evidence and a consistent, successful model
- 49 percent stated their hospital is too small to benefit from an ACO
- 26 percent stated that the cost of creating an ACO outweighs potential incentives
- 13 percent stated that the performance benchmarks are unrealistic for their hospital
- 4 percent stated the transition would overwhelm the staff
Financial Pressure:
Among all respondents, 89 percentare concerned with their hospitals’ ability to address cost pressure. To combat those costs, 60 percent want to focus on reducing waste and inefficiencies, while almost 20% are considering salary and staff reductions, and 15 percent are working to improve quality of care to reduce costs.
Electronic Health Records (EHRs):
Almost all (95 percent) respondents surveyed are implementing Electronic Health Records (EHRs). 49 percent are in the process of completing or have completed Stage 2 of Meaningful Use; 41 percent are in the process of completing or have completed Stage 1, and 5 percent are migrating to a new EHR.
The top concerns among hospital executives as it relates to EHRs include:
- Interoperability with other providers (56 percent)
- Data retrieval and analytics (50 percent)
- Ongoing staff readiness and training (49 percent)
- Infrastructure and technology (49 percent)
- Patient engagement (37 percent)
- Vulnerability to data/security breaches (35 percent)
- Vendor partnership and engagement (31 percent)
- Disaster recovery planning (30 percent)
- Long-term preservation of the records (18 percent)
“This survey has identified a significant need for advocacy and education to support hospitals and help them survive the wave of changes brought on by the Affordable Care Act,” Mary Anne Sloan, director of Purdue Healthcare Advisors, stated. “Hospital executives are charged with enhancing patient care and managing margins with a shrinking workforce and diminishing patient volumes.”
“The bottom line CEOs and CFOs are asking is how can we do this in an efficient way and meet all of these initiatives that we have to meet and remain financially sound?” stated Sloan. “I was at an event recently with a couple of hospital CFOs. Their biggest concern was the immediate uncertainty of inpatient volume and whether health exchanges will increase the number of insured while they simultaneously see a rise in their charity cases and bad debt. That’s hard to predict for CFOs. When you get uncertainty like that, you can only take so much risk.”
More Optimistic CMS Study:
Just a few weeks ago, the Department of Health and Human Services (HHS) announced the addition of 123 new Accountable Care Organizations (ACOs). This brings the total to over 360 separate organizations participating in the Medicare Shares Savings programs, serving over 5.3 million covered patients. While Purdue’s survey may reveal that hospital executives fear certain aspects of the future of ACOs, they are embracing the changing landscape in practice more than their answers suggest.
We must take CMS’ own agenda into account when assessing their statements, but they do provide a much more optimistic view of healthcare reform, which helps to balance the discussion. CMS states:
Affordable Care Act provisions have a substantial effect on reducing the growth rate of Medicare spending. Growth in Medicare spending per beneficiary hit historic lows during the 2010-2012 period, and this trend has continued into 2013. Projections by both the Office of the Actuary at CMS and the Congressional Budget Office estimate that Medicare spending per beneficiary will grow at approximately the rate of growth of the economy for the next decade, breaking a decades-old pattern of spending growth outstripping economic growth.