Participants are fleeing the Affordable Care Act (ACA) in droves citing high costs and difficulties achieving benchmarks. Aetna recently pulled out from 11 states. UnitedHealth narrowed its offering to only a few states. And many smaller carriers, like the struggling start-up Oscar Health, have reduced their footprint.
“The vast majority have experienced continued financial stress within their individual public exchange business,” Mark Bertolini, chief executive officer of Aetna, said in a statement.
Among the many explanations offered, one reason has been curiously absent: these companies’ own inability to innovate.
Many Accountable Care Organizations (ACOs) are struggling with the ACA, as well. Most were able to succeed in the first year of the ACA by achieving a few basic goals, such as closing obvious care gaps.
“These organizations have been successful in the Medicare Shared Savings Program ACO model because they can and have captured, what I like to call, the ‘low hanging fruit,’” said Jay Reddy, president and CEO of VitreosHealth, a predictive and prescriptive analytics company.
What many ACOs failed to recognize is the overall goal of the ACA, which is to help transition away from the traditional fee-for-service model to a value-based care model. These organizations never looked at the ACA as a first stepping-stone toward transitioning to a value-based care model. As a result, several ACOs struggled in the second and third year as they tried to shoehorn a few value-based care techniques into their fee-for-service model, making minimal changes to infrastructure and only minor tweaks to their delivery.
“This approach makes it difficult to achieve benchmarks and be financially successful when the ‘low-hanging fruits’ are gone,” said Reddy.
Last year’s introduction of the Next Generation ACO (NGACO) is only going to make things more difficult for organizations with this mindset. The NGACO model includes higher benchmarks, but offers greater financial reward for organizations willing to take on the additional risk.
“The Next Gen program is a great opportunity for ACOs that are fully committed to transforming their care delivery model to value-based care,” said Reddy.
Unfortunately, that number is shrinking instead of growing. In July, two providers bailed out and a third is only partially participating. This leaves 18 participants in the NGACO program.
According to Reddy, to be truly successful, especially in the NGACO market, ACOs need innovative strategies to mitigate risk. Utilizing predictive and prescriptive analytics will help these organizations lower their per-member-per-month (PMPM) costs and improve quality-of-care.
“In the past, it was enough to only focus on managing ‘critical’ and ‘high utilizer’ patients to hit the benchmarks,” said Reddy. “In the newest model, this will not be sufficient. NGACOs must employ strategies, not only for cost reduction, but also cost avoidance. They need to discover those ‘hidden’ beneficiaries who will cause a significant jump in spend year over year, if they are not proactively identified and managed.”
The challenge for those organizations is to continually discover additional opportunities to bend the cost curve enough to hit their benchmark.
“VitreosHealth does this better than any other partner and provides actionable data for organizations to use easily in their existing workflows,” said Reddy. “VitreosHealth’s unique Claims+EMR+Socioeconomic predictive models and prioritization methodology will help NGACOs find those ‘harder to find’ opportunities that they have not needed and frankly have not been able to identify previously. By leveraging this data, we identify ‘hidden opportunities,’ including non-clinical risks like non-compliance, access-to-care issues, and socio-economic, behavioral, and motivational risks.”