J. Thomas Rosch, commissioner of the Federal Trade Commission, has expressed deep skepticism about accountable care organizations and said the model may actually lead to higher costs and lower quality care, according to his speech from Nov. 17.
Mr. Rosch attributed a portion of his doubts to the Physician Group Practice Demonstration, which is considered a pilot run of the ACO program. In the demo, Participating physician groups coordinated care for Medicare patients and received rewards if they improved quality and reduced costs.
Results released in September showed only two of the demo's 10 participants were able to exceed a 2 percent savings threshold in the first year of the five-year demonstration. Furthermore, only half managed to surpass the threshold after three years.
Mr. Rosch said savings from the demo "were nothing to crow about" and therefore reflect meager potential for ACOs to result in meaningful savings. In fact, Mr. Rosch said that "even in the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error."
He also says there is a valid likelihood that providers may form ACOs not in the spirit of collaboration or improving healthcare, but to gain market power.
"Against the very meager prospects for cost savings, there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power. The net result of the Shared Savings Program may therefore be higher costs and lower quality healthcare — precisely the opposite of its goal," Mr. Rosch said in his speech.
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Mr. Rosch attributed a portion of his doubts to the Physician Group Practice Demonstration, which is considered a pilot run of the ACO program. In the demo, Participating physician groups coordinated care for Medicare patients and received rewards if they improved quality and reduced costs.
Results released in September showed only two of the demo's 10 participants were able to exceed a 2 percent savings threshold in the first year of the five-year demonstration. Furthermore, only half managed to surpass the threshold after three years.
Mr. Rosch said savings from the demo "were nothing to crow about" and therefore reflect meager potential for ACOs to result in meaningful savings. In fact, Mr. Rosch said that "even in the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error."
He also says there is a valid likelihood that providers may form ACOs not in the spirit of collaboration or improving healthcare, but to gain market power.
"Against the very meager prospects for cost savings, there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power. The net result of the Shared Savings Program may therefore be higher costs and lower quality healthcare — precisely the opposite of its goal," Mr. Rosch said in his speech.
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What Results From the Physician Group Practice Demo Really Suggest About ACOsACOs May Create 3-Year Loss Before Savings Kick In
Picking Winners and Losers in ACOs: Lessons from the PGP Demonstration