The ACO initiative aims to shift the business of health care delivery from a fee-for-service model to one that pays hospitals and care providers based on quality of care, coordination of care and cost-effectiveness. It's slated to kick off on a voluntary basis next year.
In his speech, titled "Accountable Care Organizations: What Exactly are We Getting," Rosch said that while the idea of using financial incentives to reduce costs and improve quality of care is a good one, he's skeptical that ACOs will lead to any net savings.
The Congressional budget office projected that ACO formation would save Medicare $5.3 billion over the next ten years.
The total estimated Medicare spending during that period is projected to be over $7 trillion, making ACO savings less than one tenth of one percent of total Medicare spending over the next decade.
"In other words, even under the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error," said Rosch.
Still, Rosch called the projected savings "likely overstated."
The commissioner compared the ACO program to the existing Physician Group Practice Demonstration that created incentives for doctors to coordinate care delivered to Medicare patients and rewards them for improving cost and quality of life.
The results, according to Rosch "were nothing to crow about." Figures from the Centers for Medicare & Medicaid Services showed no notable savings from the majority of participating practice groups.
Rosch warned the antitrust conference attendees that any reduction in costs from a shared savings program would likely be borne by commercial payers and result in lower quality patient care.
"Whatever one thinks about the health care reform legislation from 2010, it's hard not to be skeptical about the prospects of the Medicare Shared Savings Program," said Rosch, insisting that the net result of APOs and shared savings programs would be higher costs and lower quality health care - the exact opposite of the intended goal.
The ACO program has been praised by industry, with some words of warning.
In an opinion piece published on the Health Affairs blog earlier this year, industry lobby AdvaMed president & CEO Stephen Ubl wrote that the ACO program "is the right treatment to fix the ills of our nation’s health system," but cautioned that it runs a "real danger of stinting on care" for Medicare patients.
Ubl added that the program needs "protections to ensure appropriate care for individual patients," namely an independent oversight board to prevent "arbitrary 'stinting'" from rationing care for individual patients.
The final ACO rules include improvements suggested by comments collected during the year, Medicare chief Donald Berwick said in a press release.
After months of review, the federal government finalized the rules for accountable care organizations in October. The ACOs are set to begin formation in 2012.