Provider Trends: ACOs Begin to Take Shape

Article preview from Medtech Insight - April  01, 2011

A new health-care delivery mode that could drastically alter how the industry is run took another significant step forward at the end of March, when the US Department of Health and Human Services issued proposed rules to govern Accountable Care Organizations. ACOs are designed to create strong networks of physicians and hospitals with aligned incentives focused on patient quality of care and costs. To gain some insight on possible future implications of ACOs for the medical device industry, Medtech Insight recently spoke with Ron Wince, president and CEO of the consulting firm Guidon Performance Solutions.

Provider Trends: ACOs Begin to Take Shape

Article preview from Medtech Insight - April  01, 2011

A new health-care delivery model—one that could drastically alter how the industry is run—took another significant step forward at the end of March, when the US Department of Health and Human Services (HHS) issued proposed rules to govern Accountable Care Organizations (ACOs). These highly touted entities, outlined in the Patient Protection and Affordable Care Act, passed into law in 2010, are designed to create strong networks of physicians and hospitals with aligned incentives focused on patient quality of care and costs.  ACOs can begin contracting with Medicare in January 2012 under a pilot program, and already a number of physician groups, hospitals, insurance companies, and others have started establishing the burgeoning organizations.

The proposed rule, open for public comment until June 6th, requires ACOs to accept responsibility for at least 5,000 Medicare beneficiaries for at least three years. The success of the operations will be measured on a set of 65 quality-of-care measures in five categories, and ACOs that exceed benchmarks would receive higher reimbursement rates. The Centers for Medicare and Medicaid Services (CMS) estimates ACOs could save as much as $960 million over three years. However, there is risk involved in contracting with CMS, because ACOs that fall below the benchmark would be held accountable for any losses.

Although the establishment of ACOs is moving forward, there is still a lot to learn about these organizations, including the affect they will likely have on the medical supplies and devices physicians use. To gain some insight on possible future implications of ACOs for the medical device industry, Medtech Insight recently spoke with Ron Wince, president and CEO of the consulting firm Guidon Performance Solutions, who says as hospitals and physicians work closer together, product procurement is likely to change.

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