Pioneer ACOs are Withdrawing En Masse

Pioneer ACOs are Withdrawing En Masse
March 5, 2013

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

With the passage of Obamacare came the vaunted Accountable Care Organizations, those modern breeds of HMO which were supposed to create all sorts of cost savings from higher efficiencies in health care systems. Instead, it looks like these systems are failing before they've even begun:

Cleveland [Clinic], along with other model providers like Mayo and Intermountain, declined to become one of the "Pioneer ACOs" that the Obama administration anointed to lead the way into the new promised land.  And now, it seems, many of the institutions that did agree to join the wagon train are saying that they'll pull out if the administration tries to, well, pay them for performance rather than treatment.

One of CMS' highest profile health care delivery reform initiatives is on rocky ground as most of the Pioneer ACOs are threatening to drop out of the demonstration if CMS makes them start meeting quality measures instead of merely requiring that they report the measures, according to a letter obtained by Inside Health Policy...

When Obamacare was being debated 2009, proponents banked heavily on its transformative potential.  When skeptics caviled about the costs, the reformers pointed out that there were all sorts of pilots, and delivery system reforms like these ACO demonstration projects, that hadn't gotten scored as cost-saving by the Congressional Budget Office.  Of course, some of them wouldn't work, but some of them would, delivering higher quality at low cost.  They confidently expected that Obamacare would deliver even more deficit reduction than the $118 billion that the CBO had predicted.  

So far, pretty much every one of those promised improvements has underwhelmed, and the skeptics have been vindicated. The deficit-reduction has been cut in half by the need to reform some ill-advised inclusions, such as a long-term health care program whose costs exploded just outside of the 10-year budget window, and a frankly crazy plan to make everyone in America issue 1099s to any vendor who sold them goods for cash.

Regulations have ramifications, and in this case, those regulations appear to have driven off the organizations which were designed to take up this new mantle. Obamacare will have to look elsewhere for cost savings.

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)