This morning, several of my colleagues have updated their most recent estimates of the spread and scale of Accountable Care Organizations (ACO) in the Health Affairs blog.
Our new @Health_Affairs blog #ACO Tracking paper is out: https://t.co/6xoYndEpuh For the first time, a year-over-year drop in total ACOs, but still an increase in total lives. The expansion of other value-based payment programs is key. @LeavittPartners @dukemargolis @WillBleser pic.twitter.com/WOx18ommMf
— David Muhlestein (@DavidMuhlestein) October 21, 2019
This year has been eventful for value-based care in the United States. While there has been a total reduction in ACO participants, the number of lives covered under these models has continued to grow. The new ACO program Pathways to Success has been implemented, and dropouts were significantly less than feared, while new organizations moved into the program, even with the enhanced risk requirements. There has also been an increase in the number of physician-led ACOs, and they have moved to downside risk at a slightly higher rate than ACOs with hospitals. Beyond the ACO models, there have also been significant new programs announced which will increase the opportunities for providers to move toward managing the care of populations.
Last week, CMS Adminstrator Seema Verma gave a talk at Duke University on the movement towards alternative payment models such as the ACO program. One of the things that struck me was a statement that CMS was trying to get more ACO like principles into the Exchange program in order to hold down premiums. This was intriguing for two reasons. First, it is a good indicator that the CMS priority is unsubsidized folks and not subsidized folks as lower premiums can often hurt subsidized enrollees. That is not new.
The second, and more important thing that struck me was how to operationalize an ACO in a high churn environment. Medicare and employer sponsored insurance ACOs face a far smaller churn problem. Some categories of eligibility in Medicaid face low churn while other categories of eligibility in Medicaid see high churn. The ACA individual market is a high churn segment
We know that about half the ACA enrollment pool that is signed up on January 1, 2019 will not be signed up for insurance through the Exchange on January 1, 2020. We strongly suspect that there is a differential effect by health status on re-enrollment and continual enrollment. Of the proportion of people who have at least thirteen months of continual enrollment, a decent number of them will be switching insurers. Intra-insurer churn was suppressed in 2018-2019 as monopolies were increasingly common, but more insurers entering and expanding footprints for 2020 will increase intra-insurer churn. Again, we know that this switching behavior is non-random on health factors and demographics. The folks who are continually enrolled in the same insurer for thirteen or more months are highly likely to be a much sicker and older group of beneficiaries than the pool of people who were assigned to an ACO in the first month.
I would not be surprised if prospective assignment led to an primary care physician participating in an ACA ACO model seeing eighty percent of their panel zero or one times during the year. Of the folks that they see once, I would be surprised if they see that person again in the following year. There are some folks who will require intensive case management and coordinated care who are on an ACA plan where the incentives and time horizons for ACOs to pay-off readily line up, but this is a fairly small population.
I am confused at how to operationalize ACOs in a very high churn environment.