Should senior living providers look at accountable care
organizations as safe bets or sure losers?
An ACO expert attempts to answer that question.
By Bryan Ochalla
Twenty-two months after President Obama signed the Patient Protection and Affordable Care Act, physicians, hospitals, and other health-care providers—including those in the senior
living space—are now free, per Section
3022 of that same health-care-reform law,
to combine forces, create accountable care
organizations (ACOs), and contract with
the government to provide coordinated
care to their many Medicare patients.
The question is: Will the above-men-tioned entities take their time jumping
onto the ACO bandwagon or will they do
so en masse and at the earliest opportunity? Erik Johnson, a senior vice president
with Avalere Health, a Washington, D.C.-based advisory services firm that serves
the health-care industry, doesn’t know
the answer. But he hopes, for the sake of
health-care providers and their Medicare
patients, that the former scenario is more
likely than the latter.
“The first time I ran a marathon,” John-
son says, “the best advice I got was: ‘If you
feel like you’re going slow during the race,
go slower.’ I think that’s the best advice I
can give to people who are looking down
this path, too.”
Johnson will be sharing his insights
into the potential (and potential pitfalls)
annual conference, taking place in Dallas May 16-18. He recently shared some
thoughts with Senior Living Executive
about why physicians, hospitals, and other
health-care providers would want to set up
ACOs and how folks in the senior living
space, in particular, may benefit from becoming part of them.
SLE: Can you start by explaining what’s
in it for hospitals? How do you see them
benefiting, financially or otherwise, from
setting up or joining ACOs?
Johnson: I think the decision a hospital faces in becoming an ACO—or not—is
a little bit of a “be careful what you wish
for” dilemma. That said, there are some
theoretical benefits, too. One is that, if the
ACO is established broadly enough in a
geographic area, with lots of partnerships
and collaboration, it can serve to capture
volume and market share in a given area.
Second, if reimbursement continues
its slow march toward incorporating more
and more quality-based components to
encourage behaviors that produce higher
quality results, then the ACO construct
offers health systems and their partners
the opportunity to benefit from delivering
A third benefit is that there is going to
be a lot of pressure in the years to come to
reduce utilization. The ACO construct, at