By Gregg A. Masters, MPH
Timing can be everything at times, no?
Just after completing the post: ‘From “Unicorns to Multicorns” ACOs Morphing Below Radar‘, I received information from Oliver Wyman, a Marsh McLennan Company, previewing a study which documents (at least for some) ‘unexpected’ results in the world of ACO penetration.
For background market scaling or ‘ACO virality’ context, be mindful we had a bit of an energetic but collegial exchange between HMO industry veteran William DeMarco and noted healthcare futurist Jeff Goldsmith. DeMarco was opining on the prevalence of ACOs et sequelae, while Goldsmith ridiculed DeMarco’s referenced math via the post ACO Explosion, carried forward into ‘Are Hospital Business Models on a Burning Platform? Not Yet, But It’s Inevitable’ by Vince Kuraitis at the Healthcare Blog. DeMarco notes that:
….20% of Medicare beneficiaries…will be connected to Medicare through their ACO by 1.1.13..’
[add] Medicare Advantage beneficiaries [27%]…a factual statement…[and ACO share will approach] 50% of Medicare population.’
To wit, Goldsmith skeptically retorts:
The Medicare ACO program “covers” less than 5% of Medicare beneficiaries, and a tiny fraction of it will actually resemble full risk. There is simply no evidence of momentum toward risk-sharing with hospitals in the current payment stream. Medicare Advantage is growing at 10% a year, but most of the hospital contracts are not shifting risk to hospitals. DeMarco’s forecast is laughable.
Now add to this thread data from the Oliver Wyman Group (aka @OliverWyman) structured inquiry. (Editor’s note: Marsh McLennan is not a newcomer to the healthcare risk, actuarial, underwriting or consulting broker universe. Progenitors of InterQual’s the ‘Potentially Compensable Event’ hospital survey commercially morphed into the ‘generic screening criteria’ for the Intensity of Service/Severity of Illness data set, they could be arguably considered one of, if not the principal founders of the clinical risk management or quality assurance industry. Take away: listen to what they have to say, tweeps!).
In just two years, a new model of healthcare captures 10 percent of the market.
The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise”, our analysis finds that 25 to 31 million Americans already receive their care through ACOs—and roughly 45 percent of the population live in regions served by at least one ACO. While relatively few organizations have achieved the full potential of the model, the top performers are already generating savings and delivering improved care.
For the complete Oliver Wyman report, click here.
Man, things are really starting to get interesting!