Majority of Hospitals, Health Systems, Insurers Undecided About Medicare ACO Participation, KPMG, EBG Led Poll Shows Many Believe Their Organizations Lack Comprehensive Understanding of Changes and Financial Implications; Do Not See Real Results in Coordinated Care in the U.S. for 5-10 Years
NEW YORK, Dec. 19, 2011 /PRNewswire/ -- The majority of senior executives at hospitals, health systems, and insurers are still undecided about their organization's participation in the Medicare Shared Savings Program (MSSP), commonly referred to as the Medicare ACO program, according to a poll conducted by KPMG LLP, the U.S. audit, tax and advisory firm; Epstein Becker Green (EBG), a national law firm; and The JHD Group.
Reflecting that uncertainty, the executives surveyed said their organizations do not have a comprehensive understanding of the various Centers for Medicare and Medicaid Services (CMS) programs and their financial implications, even after publication of final rules.
"Our survey findings indicate that healthcare leaders are still trying to get their hands around the opportunity and the risks associated with these programs," said Ed Giniat, partner and sector leader for KPMG Healthcare and Pharmaceuticals. "Clearly, the priority for executives is to rapidly increase their knowledge about payment model reform and to accelerate their organizations movement toward new business models."
Hospital and Health Systems
According to responses from healthcare leaders who participated in a webcast poll in November, 57 percent of hospital and health system respondents said they still don't know how the final rules will impact their organization's participation in the MSSP program. Sixteen percent, on the other hand, said their position was unchanged and they are still planning to participate, while seven percent said the final rules have moved them to participate. Thirteen percent, however, said their position not to participate remains unchanged.
Among health insurers, half of those polled said they still don't know about their organization's potential participation in the MSSP program. Nineteen percent said the final rules had changed their position and they now plan to participate, and 10 percent said the final rules have had no impact on their decision and still plan to participate. Only 2 percent said the final rules had no impact on their decision and they still don't plan to participate.
Understanding of CMS Programs, Financial Implications
In fact, when asked about their organization's understanding of the various CMS programs and their financial implications, 36 percent of hospital and health system leaders said it was advanced or comprehensive, with 55 percent describing it as competent or decent, and 7 percent labeling it as weak.
Health insurers echoed a similar sentiment: 26 percent said their understanding was advanced or comprehensive, 62 percent said it was competent or decent, and 12 percent said it was weak.
Additionally, when asked how long it would take to achieve real results in coordinated care in the U.S., close to half of hospital and health system and insurer respondents said it would be 10 years, while 38 percent of respondents from hospitals and health systems and 43 percent of insurers said it would be 5 years.
Brad Benton, KPMG Healthcare's national account leader said, "What we're really talking about here are basic, open questions about emerging healthcare business models, as well as the velocity and timing regarding transition from legacy fee-for-service reimbursement to fundamental value-based reimbursement, regardless of the payment reform model that they choose.
"It's not going to be easy to solve. And clearly, it is going to take time. It's a very complex business model and change management discussion," he said.
Leaders were divided on where they would seek help in meeting the challenges and opportunities of the industry's transformation. Twenty percent of hospital and health system respondents said their best partner in this transformation would be local peers and colleagues who share the local market experience, followed by someone who can help their organization define a strategy and vision (19 percent), larger hospital systems with capital (18 percent) and systems-based consulting (11 percent).
Added Joe Kuehn, partner and KPMG Healthcare financial management leader, "This is not just a question of governmental payment programs. Our work tells us that the commercial markets are in the midst of rapid transformation around payment model reform. Going forward, the most successful healthcare organizations will be those that are operating in an "accountable care capable" fashion, and those organizations may well be hybrids as compared to traditional healthcare organizations."
In other findings, when asked in which program their organization would most likely participate within the next two years, 16 percent of hospital and health system leaders said they would participate in the CMS bundled payment model. This was followed by a launch of their own ACO structure (14 percent); participation in the CMS MSSP program (9 percent) and initiate significant M&A activity to compete (4 percent).
The KPMG Healthcare & Pharmaceutical Institute, Epstein Becker Green, and The JHD Group conducted a webcast on the MSSP ACO final rules in November 2011 for about 500 healthcare industry professionals. The results reflect responses from more than 100 hospital and health system leaders and about 40 insurer leaders who self selected to participate in the webcast poll. A replay of the video webcast can be accessed via the following KPMG Healthcare and Pharmaceutical Institute link: http://www.kpmginstitutes.com/healthcare-pharma-institute/events/mssp.aspx.
The KPMG Healthcare & Pharmaceutical Institute (www.kpmghealthcarepharmainstitute.com) provides a forum for healthcare business leaders to gain insight into emerging issues, consider approaches to help balance risk and controls and improve performance, and further explore the accelerating transformation within the healthcare industry, both domestically and globally.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 145,000 professionals, including more than 8,000 partners, in 152 countries.
About Epstein Becker Green's Health Care and Life Sciences Practice
For nearly 40 years, Epstein Becker Green (www.ebglaw.com) has been at the forefront of health care law, taking the lead in understanding, interpreting, and shaping the laws and regulations that affect every institution involved in health care and life sciences.
About The JHD Group
Since 1998, The JHD Group (www.jhdgroup.com) has been a leader in assisting physician organizations meet the challenges of care delivery, patient services, managed care, technology integration, market development and profit/income improvement.
Laura Sheridan Powers
SOURCE KPMG LLP