Dec 5, 2014

Guest article by Dave Vreeland, Partner, Cumberland Consulting Group

There’s no question that the healthcare industry is in the middle of disruptive change. Patients are entering the Medicare program at a rate faster than our nation has ever seen, driven largely by 80 million baby boomers’ retiring. According to a Pew Research Study, about 10,000 baby boomers will reach retirement age every single day until 2030, when all boomers will have turned 65. In addition, our country is facing its worst debt levels in history. Current U.S. debt estimates are equivalent to our GDP, or approximately $16 trillion. The confluence of these two factors creates an environment that demands change in the way we deliver and pay for healthcare services; it’s not a matter of healthcare financing trends – it’s simply about math.

Accountable Care Organizations (ACOs) are attempting to lower costs while taking a population health management (PHM) approach to care delivery. The headlines related to ACOs’ progress have been mixed at best. The Centers for Medicare & Medicaid Services (CMS) recently touted the success of its Pioneer ACO program in improving the quality of care for Medicare beneficiaries and in generating savings. However, of the 32 organizations that launched CMS’s Pioneer ACO program in 2011, only 19 remain. Approximately one-third left after the first year; and after the second year’s financial and quality performance results were released in September, another three backed out of the program.

So what’s really going on? Many organizations aren’t ready or willing to accept the financial risk associated with these new payment and delivery models. Creating and sustaining a financially viable ACO is hard work in uncharted territory. There is no direct roadmap for success. Even so, healthcare reimbursement is changing, and organizations must adapt to a model that rewards meeting quality objectives for an entire patient population, rather than for each service rendered.

Read the full article in the December issue of CHIME’s CIO Connection.

Filed under: In The News