ACO-REACH: Can a new model make health disparities a priority?

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Mar 24, 2022

How can innovators create lasting change in health care? One of the biggest influencers is payment models, particularly how providers are reimbursed for care. A new Medicare payment model, ACO-REACH, holds potential to change health care in two ways: incentivizing the development of new business models to address health disparities, and enhancing care access by leveraging nurse practitioners. 

What are ACOs?

To understand the ACO-REACH model, let’s review what Accountable Care Organizations (ACOs) are. They are groups of doctors, hospitals, and other health care providers who come together voluntarily to provide coordinated, high-quality care to their beneficiaries. The goal of ACOs is to ensure patients receive the right care at the right time, while avoiding unnecessary or duplicate procedures. When providers are able to both improve care quality and produce savings for insurers, the ACO receives a share of those generated savings. 

Different iterations of ACOs have popped up since the passing of the Affordable Care Act twelve years ago. In 2021, one iteration was the Global and Professional Direct Contracting model (GPDC). The GPDC model opened up the door for more care providers to form ACOs and benefit from generated cost savings, while prioritizing beneficiary choice and involvement in their own medical care. 

The benefits of ACO-REACH

The Biden Administration recently announced the newest iteration of CMS’ ACO innovation work, which will replace the GPDC model when it is terminated at the end of 2022. ACO-REACH stands for Accountable Care Organization Realizing Equity, Access, and Community Health. The model seeks to further CMS’ desire to find new, innovative ways to improve quality and lower costs. This time, they place a new emphasis on serving those in medically underserved communities. To highlight the differences, CMS’ comparison of the goals of GPDC and ACO-REACH is summarized below. 

The new program rolls out next year, so it will be a while before any long-term results are actualized. However, there are three promising components of the ACO-REACH model that will likely promote its future success. 

  1. Focus on health equity, particularly in underserved communities 

As part of the program, CMS is introducing a program that requires participants to develop an in-depth plan to both identify and address community health disparities. Many health-impacting factors exist at the community level, particularly those relating to the drivers of health—societal, population-level structures and forces outside of clinical care that play a role in a person’s physical and mental health and well-being. Research shows that anywhere between 30-55% of health outcomes can be attributed, at least in part, to drivers of health. 

In putting health disparities at the forefront of ACO-REACH, CMS is not just setting a new precedent for how providers should approach care, but promoting business models that incentivize care that addresses drivers of health. CMS is traditionally the first step for innovative new models to gain traction. If the ACO-REACH model is successful in addressing health disparities, it could open the door for insurers to financially incentivize the provision of non-clinical care. 

  1. A change in who provides primary care

One of the biggest challenges in providing care in underserved communities is a shortage of primary care providers. In his book The Innovator’s Prescription, Professor Clayton Christensen wrote that as medical technology advanced, nurse practitioners (NPs) would be able to take on much of the primary care physician’s duties, opening up a new employee stream for an often understaffed specialty. 

ACO-REACH is introducing a benefit to expand the scope of practice for nurse practitioners within participating ACOs. While a nurse practitioner may seem “not as good” as seeing an MD, this move provides a lot of potential. First, the planned transition from MD to NP can address the dearth of care providers in underserved areas. Second, it could lower the cost of care, given NPs are less expensive to employ than MDs. Third, it opens up doctors’ schedules to focus on higher acuity issues, particularly in underserved communities, which NPs may not have the ability to address. 

  1. Providers playing a bigger role in ACO governance 

Under the GPDC model, providers only had to make up 25% of an ACOs’ governing board. As a result, any decision made by an ACO would have limited input from the people treating patients. The ACO-REACH model is increasing that percentage from 25% to 75%. Now, governing decisions will be made by those who are impacted the most, and those who are closest to what their patients need.  

When providers see patients, they can get to know their patients’ needs and wants, both inside and outside of health status. By making providers the majority decision-makers, patients can be better advocated for, and changes made can be ones that actually help patients make the progress they seek.

Why we should watch ACO-REACH

ACOs encourage new business models that incentivize the quality of health outcomes over the quantity of services provided. ACO-REACH goes a step beyond that, encouraging new business models that incorporate financial incentives for addressing disparities and enhancing access through greater utilization of nurse practitioners. 

If ACO-REACH can prove that addressing disparities can profitably improve health outcomes, the program could lead to a sea-change in care provision. Success would show that addressing health disparities and medically underserved communities is not just beneficial to patients, but a move that can be financially sustainable for providers as well. 

Jessica is a research associate at the Clayton Christensen Institute for Disruptive Innovation, where she focuses on business model innovation in healthcare, including new approaches to population health management and person-centered care delivery.