ACOs Find Success With Greater Incentives, Flexibility

A new breed of accountable care organizations (ACO) that allows groups of healthcare providers to share in both gains and losses from coordinating care under Medicare showed promising results in its first year, saving Medicare $62 million in 2016, about 1.7%. A Centers for Medicare and Medicaid Services (CMS) report on these next generation ACOs also found evidence of quality improvement. Beneficiaries had 1.3% fewer acute care hospital days per month, 1.5% fewer nonhospital visits per month, and 11.9% more annual wellness visits per year.

ACOs are groups of healthcare providers that agree to take responsibility for the total cost and quality of care for Medicare patients. In the new model, ACOs not only receive a portion of the savings they achieve versus benchmarks but also are responsible if they overspend.

“These results provide further evidence that ACOs succeed under two-sided risk,” said CMS Administrator Seema Verma. “ACOs in the Next Generation Model are being held accountable with strong financial incentives and are provided with substantial flexibility and regulatory relief. They are delivering value and providing quality care to patients and taxpayers even in their first performance year.”

One reason for the success of these ACOs may be a lighter touch on regulation, according to Verma. For example, traditional fee-for-service Medicare only allows telehealth in specially designated rural areas, but next generation ACOs can use telehealth anywhere. They also have greater flexibility under post-discharge home visit rules.

Verma plans to accelerate the pace at which providers can form ACOs and enter the two-sided risk model. The latest data show that, overall, 472 traditional and next-generation ACOs together cared for 9 million beneficiaries in 2017 for a total of $1.1 billion in savings compared to their benchmarks.

HHS Partners With Industry for Home Flu Tests

The Department of Health and Human Services (HHS) will support development of two influenza A and B virus tests designed for over-the-counter sale. The agency’s Biomedical Advanced Research and Development Authority (BARDA) will provide $14 million to Cue Health and $10 million to Diassess, with the option to extend additional funding of $30 million and $21.9 million, respectively, for developing home use tests that give results within 25 minutes.

“Empowering people to answer the basic question, ‘Do I have the flu?’ without leaving home could have a profound effect on controlling and treating influenza…,” said BARDA director Rick Bright, PhD. “Putting that power in patients’ hands could transform the speed and delivery of care. In a pandemic, that equates to lives saved and stronger national health security.”

Both companies receiving grants will use mobile technology to enable patients who test positive to access telemedicine consultations and antiviral drug prescriptions from home. The companies are also working on a feature that will allow the devices to report de-identified flu data to local health departments in real time. Diassess expects its model to be disposable and battery-powered for use during public health emergencies. Cue Health is also developing tests for Zika and HIV.

Uninsured Rate Stable in 2017

During a period of rising household income and under an administration that urged repeal of the Affordable Care Act, the uninsured rate in 2017 was not statistically different from 2016, according to a Census Bureau report. Nearly 9% of people in the U.S., or 28.5 million, did not have health insurance at any point during the year. During the same time, real median household income increased by 1.8%, up to $61,372.

The numbers of people without insurance varied by state: The uninsured rate actually increased in 14 states and declined in three. Louisiana showed the largest decrease—1.9%—after expanding Medicaid in 2017.

Private insurance coverage still dominates at 67%. Most private plans are employer-based, covering 56% of the population. Medicaid and Medicare are the next most common, at 19% and 17%, respectively.