Kip Sullivan Discusses the Flaws and Future of the Medicare ACO Program (April 17th)

Listen NowThe Medicare Shared Savings Program's Accountable Care Organization (ACOs), created by Section 3022 of the 2010 Affordable Care Act constitutes the flagship Medicare pay for performance (P4P) program.  Though there are other P4P (also termed pay for value) models, for example two bundled payment models (Bundled Payments for Care Improvement and Comprehensive Care for Joint Replacement), they are short-lived CMS demonstrations.   If the federal government is to bend the Medicare spending curve or make the program more financially sustainable it will likely be due moreover to the success of ACOs.  Though provider participation in ACOs is substantial, this year there are 561 ACOs providing care to 10.5 million Medicare beneficiaries, the program has to date achieved marginal success.  Over four performance years (2013-2016), ACOs have saved substantially less than one percent of annual Medicare spending (now over $700 billion) - which is why the DHHS Secretary Alex Azar recently admitted candidly ACO performance has been "underwhelming" and "lackluster."  Even before the Medicare ACO program formally began there have been questions and criticism about the model's design.  Perhaps no one has written more about the model's flaws than Kip Sullivan.    During this 32 minute conversation Mr. Sullivan discusses the genesis of ACOs including results from its predecessor, the Physician Group Practice demonstration, assumptions made in the the design of the model, e.g., the relationship between cost and quality and the effectiveness of financially incenting physicians, and moreover the problem of addressing care quantity instead of pricing.  In sum, Mr. Sullivan argues the Medicare ACO model is fatally flawed and will not achieve meaningful success. Mr. Kip Sullivan is currently a member of the board of the Minnesota chapter of Physicians for a National Health Program.  Mr. Sullivan began his career as a staff attorney for the New York Legal Aid Society and as a researcher for Citizens Action League in California.  Form 1980 through 2000 he researched universal health insurance and a single payer system for Minnesota COACT (Citizens Organized Acting Together).   He also served as a consumer representative on the Minnesota Governor's Health Plan Regulatory Reform Commission in the 1980s.  From 2000 to 2007 Mr. Sullivan was a health system analyst for the Minnesota Universal Health Care Coalition.  Mr. Sullivan has written over 150 health policy articles for the American Journal of Public Health, the Journal of Health Politics, Policy and Law, the LA Times, The Nation, The New England Journal of Medicine, The New York Times, and others.  He published 2006 "The Health Care Mess: How We Got Into It and How We'll Get Out of It."  Mr. Sullivan earned his undergraduate degree from Pomona College and his law degree the Harvard School of Law.   Mr. Sullivan's latest essay, "Curb Your Enthusiasm," is at: http://thehealthcareblog.com/blog/2018/04/16/curb-your-enthusiasm/.The Lawton Burns and Mark Pauly essay titled, "Transformation of the Health Care Industry: Curb Your Enthusiasm," in the the recent Milbank Quarterly, that is noted during this discussion is at: https://onlinelibrary.wiley.com/doi/full/10.1111/1468-0009.12312. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.thehealthcarepolicypodcast.com