Accountable Care Organizations May Dominate Original Medicare
Original Medicare consists of Parts A and B, a Part D drug plan, and usually a Medigap supplement plan that plugs holes in what Parts A and B pay for approved claims. This is known as fee-based care. It works well but the care recommended by your doctors and hospitals generally is approved with no effort to determine its impact on your health. This leads to more care that may do little for your health while costing Medicare a lot of money.
Value-based care, by contrast, is linked to your health. Doctors and other providers can be financially rewarded for good health outcomes, even if they involve providing less health care.
The push to encourage value-based care is being led by groups of doctors and affiliated health providers who have been creating what are called “accountable care organizations,” or ACOs. The Centers for Medicare & Medicaid Services has supported several programs in recent years to evaluate different approaches. The big challenge is devising a payment system that rewards doctors enough for positive patient outcomes to compensate them for the reduced volumes of care they have enjoyed under fee-for-service Medicare.
The agency is still searching for the sweet spot here. Nonetheless, it announced last year that its goal was that everyone with Original Medicare would be in an ACO by the year 2030. That’s upwards of 30 million people.
At their best, ACOs weed out unproductive care and focus on treatments that make patients healthier. Potentially, these treatments could involve much more preventive care and even financial support for non-medical care such as better nutrition and healthier living conditions. Primary doctors are the stars of ACOs, providing patient-centric care tailored to individual needs.
The program’s greatest potential is in serving what are called “high-risk” patients. These folks have multiple health issues and run up big medical bills. Improving their health can provide large returns for value-based care.
Consumers generally know little about ACOs, including whether they’re even in one. But there’s a good chance you are, and these odds are rising. “Overall, in 2024 there are about 13.7 million people with Traditional Medicare aligned to an ACO,” the agency reports. “ACOs are now serving nearly half of the people with Traditional Medicare, a 3 percent increase since 2023.”
The agency will have to do better than 3 percent annual growth to meet its 2030 goal. I urge you to find out if you’re in an ACO and to ask your doctor about how your care could change as a result. They may not have great answers yet. ACOs are new to them, too, but changes are coming.
