• Are ACOs providers or insurers? Sometimes both.

    Yesterday CMS announced 27 new “shared savings” ACOs. A tip of the hat to Charles Roades, Chief Research Officer of The Advisory Board Company, who tweeted that among them are nine provider groups (IPAs) that are affiliated with Collaborative Health Systems. Collaborative Health Systems is a subsidiary of Universal American Corporation, which offers insurance products, including Medicare Advantage plans.

    So, are ACOs providers or insurers? Usually they’re thought of (and are) provider groups. By definition they can’t be insurers only. However, in some cases, they’re both. To what extent does integration with an insurer matter? Time will tell.


    Related, CMS also announced five participating organizations in its “advanced payments” flavor of ACO programs. There’s one more flavor, Pioneer ACOs, of which there are 32. Not yet announced are the “zesty ranch” and “chipotle” flavors (h/t Jeffrey Young).


    • Interesting that this post gets zero comments while the subsequent one (on a likely flawed study by an AEI researcher on cancer spending vs mortality/survival gain) got four.

      Anyway, my take: this is good, because pure fee for service is bad. Many of the payment reforms that happen from here on out will be aimed at getting providers to take on some degree of financial risk. In some cases, Medicare will fumble (the bundled payments demonstration for post acute care providers involves a degree of financial risk that’s infeasible for most of them imo, although I’m sure there are hospitals who can take it on). But this will be the trend.

      It’s a bit of a different thing from making sure consumers have “skin in the game”. If you ask me, I would rather the providers have more skin in the game than the consumers. Consumers usually don’t know how to sort out effective care from ineffective care. Providers at least have the resources to be able to figure it out, and ACOs and other payment reforms will make sure they have the financial incentive to do that.