Hospices Take Note: ACOs Focused on Reducing Hospitalizations

Accountable care organizations (ACOs) view prevention of hospitalization, readmissions and emergency department visits as top priorities, according to new research published in Health Affairs. Hospices marketing themselves to ACOs would do well to keep those metrics in mind when interfacing with those organizations.

Close to 1,000 ACOs cover 44 million patients nationwide as of the third quarter of 2019, prior research has found. The ACO model involves groups of physician practices, hospitals and other health care organizations — including hospice and palliative care providers — who collaborate to provide coordinated care to patients. The programs are designed to improve the quality of care while generating cost savings, according to the U.S. Centers for Medicare & Medicaid Services (CMS).

“Among the key issues that many ACOs are very focused on are metrics like emergency department visits, inpatient hospitalizations, readmissions, and that’s where the thinking is given the focus of [ACO] programs,” said Robert Saunders, research director for payment and delivery reform at Duke University’s Margolis Center for Health Policy, and co-author of the new Health Affairs study. “Hospice and palliative care providers may need to think about this and articulate how their programs are going to affect those particular metrics, since that’s where a lot of the energy for ACOs is right now.”


Patients who enroll in hospice are far less likely to be hospitalized than patients who do not elect hospice, according to a 2014 study. Likewise, hospice patients tend to have lower health care costs during the last year of life than other patients and are five-times more likely to die in their homes in accordance with their wishes.

Patients who receive palliative care are also considerably less likely to seek hospitalization or emergency department care.

ACOs have the potential to be major drivers of serious illness care, including palliative and end-of-life care, but few of those organizations are implementing specific care strategies for that population, the study indicates. The care models and business models employed by many ACOs are conducive to some of the necessary programs and competencies needed to care for the seriously or chronically ill, such as 24/7 access to clinicians, home-based health care, and caregiver education.


While many providers would struggle with the lack of a reimbursement model for those services, an ACO would be able to generate cost savings that could ultimately feed their bottom lines. However, some barriers are standing in the way of widespread adoption.

These barriers include a lack of upfront capital, workforce shortfalls, a lack of sufficient data to identify the seriously ill among their patient populations and the challenge of making the business case for such strategies to ACO leadership, according to the study.

“There’s varying capabilities of these ACOs to either directly offer palliative care services, or to partner with organizations that offer palliative care services,” Saunders told Hospice News. “Some ACOs, especially those who are physician group-led, are going to have less capital available to offer these services, and maybe just less bandwidth to do so. And as a result, we saw lower rates of uptake of either community-based palliative care or hospital-based palliative care.”

Upcoming opportunities may help reverse this trend, including new payment models emerging from CMS, such as the Primary Care First payment models, including the Seriously Ill Population model and those associated with direct contracting programs.

The agency first announced the program in April and will implement the models in phases beginning in January 2021, initially in 26 regions throughout the United States. Hospices and palliative care organizations are eligible to participate in the payment models provided they meet the program’s criteria. The program is designed to control costs, reduce avoidable hospitalizations and improve care coordination.

“The Primary Care First serious illness track — and possibly the new direct contracting program, which has a new high-need, high-cost patient track — may be ways that an ACO can have greater resources and focus on their serious illness populations. Those are still new and so we’re waiting to see what happens, but I think that’s an exciting opportunity for an ACO to be able to expand their serious illness offerings”

Companies featured in this article: