An important, in-depth article in Forbes on why ACOs aren't likely to curb Medicare costs, plus valuable recommendations of what would work.
How does Medicare accomplish this? First Medicare must make greater use of existing capabilities to manage, in an evidence-based way, the appropriate use of prescription drugs, of expensive diagnostic imaging, and of expensive therapeutic interventions. There is a large benefits management industry in this country with a proven track record in managing these powerful but expensive components of health care. While Medicare has taken some advantage of pharmacy benefits managers (PBMs), optimal use of PBMs along with radiology benefits management and initiation of management of other expensive procedures and interventions (only as best medical evidence dictates) should be able to shave $10 billion or more off annual Medicare spending.
How much could this save? Estimates range from as low as 10-15% to as high as 25-30% of all healthcare expenditures. For fee-for-service Medicare this could mean from $40 to $120 billion per year.
Is this possible? It is already being achieved within the well-performing Medicare Advantage plans where primary care physicians are delivering quality care, gaining reimbursement of 150-200% of fee-for-service Medicare, and controlling unnecessary resource utilization.