From An Actuary
This edition of The Actuarial View discusses the Brookings Institute presentation on accountable care organizations and the stated objective for such organizations by the Centers for Medicare & Medicaid. Accountable Care Organizations are described within the Patient Protection and Affordable Care Act and offer opportunities to participate in Medicare's Shared Savings Program.
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Tim Luedtke, FSA, MAAA, CFA
Diane Luedtke, FSA
Accountable Care Organizations . . .
The 'Triple Aim'
A key focus of the conference outlined how accountable care organizations (ACOs) sought to achieve the 'Triple Aim' that would:
The objective of ACOs is to redefine and achieve these aims without simply becoming a repackaging or renaming of today's status quo system of health care.
Don Berwick's ACO Goals
Through a personal story, Dr. Berwick laid out the vision for a health care system that plans ahead, works as a team, and puts the patient (or their advocate) in charge by:
Putting the Patient and their Family at the Center - engage people in the decisions about their therapeutic options and allowing them to choose what works best for them
Creating a Health Care System that has a Memory - through technology and improved approaches to administering care make sure that those that need information have it, so that patients and their caregivers do not continually have to repeat their stories
Create a System Where Hand-offs Matter - too often the mistakes that occur, happen when care changes from one caregiver to another; eliminate these errors and the associated waste
Respect Resources - resources are valuable and the effort is not around withholding care, but rather about eliminating waste
Reinvest Where Investment Counts - today's health care system makes investments to increase volume and throughput, tomorrow's investments are envisioned to be focused on patient value and outcomes
An aspect of this vision is for a reimbursement system which rewards those who provide value through acceptable risk sharing mechanisms. The reimbursement system will seek to avoid opportunities for cherry-picking risks, so that beneficiaries are protected and choice is maintained. The system must recognize that only 10% of the variation in health status is due to health care, the rest is due to genetics or environmental factors (behavioral choices, risks in society, etc.). You can hear the presentations here. The audio versions are the most complete and if you'd like to hear Dr. Berwick's personal story it begins at approximately the twenty minute mark of the first audio track.
John Bertko, former Chief Actuary for Humana and currently a Guest Scholar at Brookings, discussed risk adjustment. He outlined how actuarial adjustment will be a good mechanism for adjusting payments for and within an ACO. Mr. Bertko's presentation is here at about the 15:40 mark. Should your organizations or clients become interested in ACOs, please give us a call.