By David Pittman, Washington Correspondent, MedPage Today
Published: June 14, 2013
WASHINGTON -- More than 40% of accountable care organizations (ACOs) formed under Medicare exist in only five states, leaving many states with one or none, according to an analysis by industry experts.
Medicare ACOs are concentrated in states like Florida (32), California (22), and Massachusetts (18) but rural states -- like North Dakota, South Dakota, Utah, Wyoming, Oklahoma, and Kansas -- are devoid of them, according to the analysis by consulting firm MedeAnalytics in Emeryville, Calif. Others like Montana, Idaho, Mississippi each only have one Medicare ACO.
This maldistribution problem needs to be addressed to ensure Medicare is treating the country's sickest patients in a better, more coordinated fashion, Sen. Ron Wyden (D-Ore.), said at the Fourth National ACO Summit here.
"Healthy seniors in Massachusetts can access [several] Medicare ACOs, and more vulnerable older people in Alabama have none," Wyden said, noting Alabama has the highest prevalence of diabetes in the country.
Medicare needs to better address this to help incentivize ACO development and foster care coordination in areas where it is most needed, he said.
"Medicare reimbursement should be reconfigured to target areas with the highest incidence of chronic illness and reward practitioners in those areas to improve care and hold down costs," Wyden said.
States with the highest number of Medicare ACOs -- Florida, California, Massachusetts, Texas, and New York -- all have a high number of either academic medical centers or Medicare beneficiaries, Ken Perez, director of healthcare policy at MedeAnalytics, told MedPage Today in a phone interview. Those five states combine to account for 104 of the 253 Medicare Shared Savings ACOs, he said.
Providers in rural settings will have difficulty making ACOs successful, according to David Howard, PhD, associate professor of health policy and management at Emory University in Atlanta. Most of the cost savings ACOs hope to generate come from specialists, which rural areas don't have and therefore can't integrate into ACOs.
"If patients in a rural area are leaving the area to go to specialists in cities, that's all outside the control of ACOs," Howard told MedPage Today in a video interview.
It is unknown if ACOs backed by commercial payers rather than Medicare operate in some states with few or no ACOs, Perez said. Roughly 300 such commercial ACOs exist nationwide, but MedeAnalytics doesn't track where they exist.
Whereas Medicare has 33 cost measures for its ACOs, private payers can negotiate far fewer in models they set up, giving providers greater options.
While Medicare's Shared Savings model is more rigid and might be too costly or difficult for smaller providers to establish, the program's lesser-utilized Advanced Payment model is lower-cost and lower-risk if physicians are willing to join one.
"There's no excuse for people," Perez said. "It's just they don't have the wherewithal or the population to run an ACO."
Perez noted many physicians are taking a wait-and-see approach to establishing an ACO, but it could be 3 to 5 years before it's truly known if these models will work.
David Pittman is MedPage Today’s Washington Correspondent, following the intersection of policy and healthcare. He covers Congress, FDA, and other health agencies in Washington, as well as major healthcare events. David holds bachelors’ degrees in journalism and chemistry from the University of Georgia and previously worked at the Amarillo Globe-News in Texas, Chemical & Engineering News and most recently FDAnews.
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