ACOs and Insurers

If you haven’t subscribed to MDSI’s newest digital publication, ACO Insights, then you’re missing out on regular news, opinion and analysis of one of the biggest topics in healthcare today. In the latest issue health plans/insurers are covered, specifically where they fit into the ACO puzzle. For a free subscription, go to

Robert Zirkelbach, Press Secretary, America’s Health Insurance Plans (AHIP); and attorney Stephanie Kanwit, of the law firm Manatt, Phelps & Phillips, LLP and a former general counsel for AHIP, shared their thoughts on ACOs and health plans. Here is an excerpt:

Q: Why should health plans/insurers be involved in the development and implementation of accountable care organizations?

Robert Zirkelbach: Health plans have pioneered many of the types of care coordination and disease management programs that will be crucial to any type of ACO. ACOs are in many respects just another name for what health plans have been doing for several years.

Health plans are also the only entity in the healthcare delivery system that sees the patient’s entire interaction with the healthcare system. The health plans see if patients are filling their prescriptions, getting refills, and visiting physicians and other care providers. They’re in a position to coordinate all of the patient’s care and then identify those patients that would be better candidates for more coordinated care.

Stephanie Kanwit: Many articles and discussions about ACOs properly talk about them as an attempt to get from volume-based care to value-based care, and note that the new health reform act gives impetus to this trend by provisions dealing with the Medicare Shared Savings Program as well as Medicare “pilots.” Unfortunately, some narrowly define an ACO as groups of providers — physicians, hospitals, etc. — with which payers can contract using financial incentives. I would argue that health plans are integral to any transformation of the delivery system for health care for a number of reasons:

(1) Health insurance plans can coordinate care across providers, providing a 360-degree view of an individual patient. One of the reasons for the high cost of the current system is the failure to coordinate care, often delivered by multiple providers, as well as lack of emphasis on access to primary care. They also can facilitate population health management and health risk identification both inside and outside the ACO; examples would be reminders to seek care, no matter from which provider, or management of chronic illnesses.  

(2) ACOs need an infrastructure to track clinical information and enable the exchange of information (HIT), as well as to conduct outreach to and coordinate care for patients across different settings, whether in a hospital or in a clinic. Health insurance plans have highly advanced IT infrastructure that they use for clinical, operational, and administrative functions.

(3) ACOs need to be fiscally responsible, capable of managing risk and engaging in appropriate risk allocation. After all, ACOs are not a new idea, but similar to the “provider-sponsored organizations” that flourished in the ’90s, but many of which ran into difficulties because of this issue. Health insurance plans have the ability to assume and manage risk to assure financial stability, including rigorous standards of solvency as well as a history of quality improvement activities. 

(4) Health insurance plans also can deliver the flexibility in structure and process essential to ACOs; they have the historical knowledge and ability to develop and manage innovative payment methods and numerous financing and delivery options which are the essence of ACOs, e.g., new payment methods (bundled payments, global payments, partial or full capitation), as well as experience managing different kind of networks allowing patients to chose among high-quality providers.

To read this article and the March issue, visit

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