States and ACOs

In my lifetime, several presidents — including Harry Truman, Richard Nixon and Bill Clinton — pushed for comprehensive health reform but failed to get the legislation passed in the Congress.  But in March 2010 Congress passed the U.S. Patient Protection & Affordable Care Act and the Health Care and Education Reconciliation Act, which were both signed by President Barack Obama.

The Affordable Care Act will touch the lives of almost every single American regardless of age or economic status. Depending on what studies you read, projections for this healthcare reform legislation indicate cost upwards of $940 billion over 10 years with millions of people added to public and private insurance programs. The goal of the ACO is to encourage healthcare providers to band together and create savings through better coordinated care.

Tucked into the new healthcare reform law are provisions to test accountable care organizations (ACOs) – groups of providers receiving set fees to deliver coordinated quality care to a select group of patients. Under the leadership of former Governor Jim Douglas, Vermont put together a strategy to launch three community-based ACOs by 2012 before many states even knew what ACO stood for.

In 2008, the Vermont legislature instructed its Health Care Reform Commission to assess the feasibility of piloting at least one ACO model as the next phase of payment reform. Along the way, it had some help from the nearby Dartmouth Institute for Health Policy and Clinical Practice, in Lebanon, NH, says Jim Hester, PhD, the commission’s director.

Working with Dartmouth’s and the Brookings Institution’s 50-plus member ACO Learning Network, three ACO pilots have emerged in Vermont. The goal, as stated in the Commonwealth Fund report on the “Vermont ACO Pilot,” (available at http://www.commonwealthfund.org/Publications/Fund-Reports/2011/Apr/High-Performance-Accountable-Care.aspx), is to “achieve delivery system reform based on the development of a true community health system that both improves the health of the population it serves and manages medical costs at a population level.”

In the months to come on my monthly post, I will be tracking the progress of the other 18 states introducing legislation this past year that defined, promoted or created a demonstration project for accountable care organizations.

Has your state moved further on legislation that addresses accountable care organizations or is your state Adjournment sine die for this legislative session, deciding to address ACOs after the courts rule on the legality of the Affordable Care Act sometime in the future?