Folks who are urging the adoption of risk-based provider contracts seem to forget the basics: To take on risk, you have understand the degree of risk you are taking on and how to manage it, and you need to have a balance sheet strong enough to take on that risk. Kaiser Health News reports:
Few hospitals interested in becoming accountable care organizations are ready to take on financial risk, according to a survey released Friday from The Commonwealth Fund.
“We’re really still at the very beginning of the adoption curve of the ACO model,” says lead author Anne-Marie Audet, who researches health system quality and efficiency at Commonwealth. “The challenge is that hospitals are still not ready to assume financial risk.”
There are already 154 ACOs serving nearly 2.4 million Medicare beneficiaries, and dozens more ACOs are involved in partnerships with private insurers. But so far, the majority of ACOs are pursuing models that allow them to share in any savings they achieve without losing money if they fail to cut costs. In other words, there’s a lot of carrot but not much stick.
But only one in five hospitals pursuing an ACO model reported that they were using
We are not there yet, and the future is uncertain, notwithstanding Ms. Audet's optimism. Why is it that we expect things to change? What is it in the future of hospital finances that will make them more interested in taking on risk in the future? Do we expect their financial capacity for losses to grow? Do we expect that there will be truly integrated care across the spectrum of care, including community-based facilities like nursing homes and rehabilitation hospitals?
This is a policy direction based on a wish and a hope, not a rigorous assessment of its likelihood of success.
Few hospitals interested in becoming accountable care organizations are ready to take on financial risk, according to a survey released Friday from The Commonwealth Fund.
“We’re really still at the very beginning of the adoption curve of the ACO model,” says lead author Anne-Marie Audet, who researches health system quality and efficiency at Commonwealth. “The challenge is that hospitals are still not ready to assume financial risk.”
There are already 154 ACOs serving nearly 2.4 million Medicare beneficiaries, and dozens more ACOs are involved in partnerships with private insurers. But so far, the majority of ACOs are pursuing models that allow them to share in any savings they achieve without losing money if they fail to cut costs. In other words, there’s a lot of carrot but not much stick.
But only one in five hospitals pursuing an ACO model reported that they were using
We are not there yet, and the future is uncertain, notwithstanding Ms. Audet's optimism. Why is it that we expect things to change? What is it in the future of hospital finances that will make them more interested in taking on risk in the future? Do we expect their financial capacity for losses to grow? Do we expect that there will be truly integrated care across the spectrum of care, including community-based facilities like nursing homes and rehabilitation hospitals?
This is a policy direction based on a wish and a hope, not a rigorous assessment of its likelihood of success.