Many Employers Interested in ACOs to Decrease Health Care Costs and Increase Value-Based Approaches, Says Aon Hewitt and Polakoff Boland

LINCOLNSHIRE, Ill., Sept. 26, 2011 /PRNewswire/ -- Employers nationwide are beginning to explore the "Accountable Care Organization" (ACO)* model as a viable option to continue offering employer-sponsored benefits, while reducing cost and improving quality of care, according to a report issued today by Aon Hewitt, the global human resource consulting and outsourcing business of Aon Corporation (NYSE:AON) and Polakoff Boland, a national health care management consulting firm.

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This survey of 674 U.S. employers reveals that 28 percent are interested or very interested in exploring ACOs, while 37 percent are somewhat interested, 24 percent are unsure and 11 percent are not at all interested.  Quality of care delivered is the top ranked factor by 82 percent of employers in evaluating the use of ACOs.  This was followed by the ability to manage the total cost of care (81 percent), patient outcomes (66 percent) and plan/provider pricing transparency (47 percent).

"ACOs are considered next-generation health care delivery models, consisting of teams of doctors, hospitals, and other health care providers and suppliers working together to coordinate and improve care for particular groups of patients," said Michael Cryer, MD and national medical director with Aon Hewitt.  "ACOs reduce cost by providing plan participants the right care at the right time.  By improving access to primary care, plan participants can avoid emergency room visits, which results in a financial reward for the ACO and shared savings with the sponsoring organization or organizations."

In addition, this survey found that 87 percent of employers believe having a primary care physician in the ACO would be a critical or important positive influence on employee acceptance of the model.  Nearly 80 percent said awareness or reputation of the sponsoring organization is critical or important in influencing employees in a positive manner and 71 percent of organizations said having different ACO networks or models to choose from would be a critical or important positive influence on workers.  Conversely, 74 percent of employers indicated that limiting patients to only ACO network providers for care and services would be a significant negative influence on employees and 66 percent said the same related to the limited track record of ACOs.  

"It's clear that ACO proponents need to educate the public about the trade-offs between networks," said Phil Polakoff, MD, MPH, MEnvSc, and managing partner, Polakoff Boland.  "ACO models help organizations reduce health care cost, waste and inefficiencies, as well as support the movement from volume to value-based approaches.  This volume to value-based shift can be seen in various employer practices today, such as pay for performance, accountable quality contracts, incentive compensation and bundled payments, which can serve as strong examples of similar successful models to employers and employees alike."

* An Accountable Care Organization (ACO) refers to the organizational mechanism adopted by the Centers for Medicare & Medicaid Services (CMS) to implement the Shared Savings Program established by the Patient Protection and Affordable Care Act (PPACA). ACOs have also come to represent a broader value-based approach of delivering care whereby providers assume more financial risk, along with the opportunity of more financial reward for delivering better care at a lower cost.

When asked to what extent each group should share in the ACO's cost management risk, employers cited medical groups the most (23 percent), followed by hospitals (22 percent), health plans (21 percent), employers (18 percent) and employees (15 percent).  

"The most feasible way to improve care and pricing is for health plans – and federal/state governments – to structure risk contracts with providers whereby physicians and hospitals are responsible for doing 'the right thing at the right time at the right cost,'" Paul Klein, principal in the Health & Benefits Practice with Aon Hewitt.  "That is the essence of accountability and will likely be the cornerstone of collaboration among stakeholders about how to drive efficiency and quality in the years ahead."

About the Survey

In June 2011 Aon Hewitt, in partnership with Polakoff Boland, administered a survey to gain insights on employer awareness of, and perspectives about, ACOs as a new way to deliver health care services to employees and dependents.  The survey was completed by 674 respondents.  These organizations provide health care coverage to more than 5 million U.S. employees and dependents, representing a broad spectrum of industries and a significant force for change in the health care marketplace.  For a copy of the survey report, Employer Driven Accountable Care Organizations, please visit www.aon.com/aco.

About Aon Hewitt

Aon Hewitt is the global leader in human resource consulting and outsourcing solutions.  The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Polakoff Boland

Polakoff Boland is a national healthcare management consulting firm that works collaboratively with physicians, hospitals, payers and purchasers on implementing value based risk contracts. The purpose of cross-sector cooperation is to harness the expertise and commitment of providers, health plans and purchasers to increase quality and reduce costs. Building trust and transparency among stakeholders is key to making the transition from fee-for-service to fee-for-value and greater risk management among the participants. For more information on Polakoff Boland, email [email protected] or visit www.polakoffboland.com.

About Aon

Aon Corporation (NYSE:AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital solutions and outsourcing. Through its more than 59,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 2007-2010, best reinsurance intermediary 2006-2010, best captives manager 2009-2010, and best employee benefits consulting firm 2007-2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.

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SOURCE Aon