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Two More Pioneer ACOs Opt Out of Value-Based Program

Massachusetts-based Steward Health Care System and Mount Auburn Hospital join the 14 other hospitals who have opted out of the Pioneer ACO Program.

By Sara Heath

Two more members of the CMS Pioneer Accountable Care Organization (ACO) program have decided to pursue other paths, reports Priyanka Dayal McCluskey of The Boston Globe.  

Steward Health Care System and Mount Auburn Hospital join the 14 other hospitals that have decided to opt out of the program.

Both Steward and Mount Auburn cite financial reasons for their exits, saying that although they had profited financially from the Pioneer program, changes for the next phase of the program have caused concern.

“We are extremely committed to the concepts of an accountable care organization,” said the president of Mount Auburn Cambridge Independent Practice Association Barbara Spivak, MD. “But because financial benchmarks were changed [under Pioneer] ,we were at financial risk.”

The situation is the same at Steward.

Both healthcare organizations have seen success in the Pioneer program. After participating in the program for three years, Steward has saved nearly $30 million, while Mount Auburn has saved over $14 million. However, the budget for next year is significantly reduced, and neither hospital believes it financially wise to continue in the Pioneer program.

Although the organizations are leaving the Pioneer program, both report plans to join a new CMS program slated to begin next year. Named the Next Generation ACO Model, this program will allow for increased financial risk, but also increased financial reward. Although the program is more intense and the stakes appear to be higher, officials from Steward are hopeful that it will have more financial gain.

“In a lot of ways, it is Pioneer ACO on steroids,” said the president of Steward’s physician network Sanjay Shetty, MD.

The Next Generation ACO model will include several of the same services offered in the Pioneer model. For example, home visits and social worker access will be granted to patients. These components emphasize CMS’s proposed commitment to creating a standard for high-quality and value-based care.

Steward and Mount Auburn are not the only healthcare organizations to leave the Pioneer ACO program. Thus far, approximately half of the 32 hospitals that began the program have opted out. This includes New England-based Dartmouth-Hitchcock Health System, which announced it was pulling out of the program just last month.

DH was somewhat successful in its ACO endeavors. In its first year with the Pioneer ACO program, the health system saved nearly $1 million. However, in the following two years, the hospital racked up $1.4 and $3.6 million in shared losses.

These losses, explained DH, were not necessarily due to hospital failures. According to DH officials, the way in which the ACO program was set up was not conducive to its specific needs.

DH outlines three features of the Pioneer model that caused the health system trouble. First, the model did not account for varying patient utilization or illness burden. Second, CMS would develop the final measure at the end of the reporting period, barring participants from assessing progress in real time. Last, the model was not conducive for hospitals that already have low costs and therefore little room for improvement, an issue that DH had.

The decision to leave the Pioneer model came as a difficult one, DH President and CEO James L. Weinstein wrote in a Health Affairs blog post.

"A leader in the adoption and application of ACO principles, DH is committed to pursuing high value population-based care through continuous quality improvement and a relentless focus on cutting waste from health care delivery by engaging providers and payers, waste that is perhaps more difficult to identify and reduce from within a very low-cost environment," Weinstein wrote.

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