"This is a historic step," HHS Secretary Kathleen Sebelius said during a press conference. "Pioneer ACOs are leaders in our work to provide better care and reduce health care costs. We are excited that so many innovative systems are participating in this exciting initiative, and there are many other ways that health care providers can get involved and help improve care for patients."
Accountable care organizations are considered the successors to health maintenance organizations, only with greater patient flexibility in selecting doctors as long as they take Medicare. They are designed to relieve patients of the burdens of "fragmented and disconnected care" in which records are lost, doctors don't communicate with one another and patients end up having to repeat the same information to multiple physicians, according to an HHS fact sheet.
ACOs innovate to improve the partnership between patients and doctors, seeking better care and lower cost growth by moving "away from a payment system based on volume under the fee-for-service model toward one where the ACO is paid based on the value of care it provides," HHS said. The groups also are considered freer to experiment with innovations.
The 32 providers named come from 18 states; urban, rural and suburban settings; and a mix of high-cost and low-cost areas, according to Richard Gilfillan, director of the HHS Center Medicare and Medicaid Innovation, which spent the past year interviewing and evaluating competing providers. Some 160 groups sent letters of interest, and 80 applied before a panel boiled the selection down to 32, Gilfillan said.
The project, set to begin Jan. 1, 2012, is expected to save $1.1 billion over five years, and builds on rules announced in October.
"ACOs have set a new standard for customer service and demonstrated unflappable commitment to leading us into the health care system of future," Gilfillan said. "The current system is not sustainable, and we are looking forward to building a better health care system for generations to come."
The HHS officials spoke just as the U.S. Supreme Court announced its schedule for oral arguments next March in the lawsuits challenging the constitutionality of the 2010 Affordable Care Act, which many see as one of President Obama's signature achievements.
"Americans continue to live sicker and die sooner than their peers around the world," Sebelius said, "and the Affordable Care Act gets rid of many of the obstacles and gives us a platform to experiment." She stressed that accountable care organizations should allow doctors to spend more time with their patients, more time talking to specialists and more time managing a patient's continuing conditions.
The pioneers, she continued, will get to keep a share of the savings they generate and, after a two-year experiment, may in the third year have the option of moving to the results-based approach to payments in treating their patients outside of Medicare. Also appearing at the press conference was Nancy Boerner, chief medical officer at the Orange County, Calif.,-based Monarch Healthcare, which is one of the 32 pioneers. She said the effort "will result in better care, better health and reduced Medicare spending" and gave examples of how nurse managers provide more "personalized care" to patients and their families "by coordinating in between physician appointments." She said her organization "feels like the early-American explorers Lewis and Clark," in that they can't know exactly how the endeavor will turn out.