People with complex care needs account for nearly one-fifth of all health care spending, even though they comprise only 1 percent of patients. These are individuals with multiple chronic conditions or functional limitations; people whose conditions carry significant nonmedical needs; and frail older adults. Their mental health, physical health, and social needs require coordination across numerous providers, family caregivers, and social service agencies. Traditional fee-for-service payment models rarely reimburse for the coordination, care management, and team-based care that this population needs.
Emerging models of health care payment and delivery, such as ACOs, present an opportunity to improve quality of care and lower costs for people with complex needs and a range of medical and social issues. Unlike fee-for-service, ACO contracts award providers with bonus payments tied to cost and quality performance for their assigned patients. So far, ACOs have achieved modest reductions in health care spending (with Pioneer and Next Generation ACOs producing more promising results than ACOs in the Medicare Shared Savings Program), and care quality has improved without raising costs — an increase in the value of health care.