VIEWPOINT
Health Care Delivery System ReformAccountable Care Organizations
James T. Dove, MD*,*,
W. Douglas Weaver, MD and
Jack Lewin, MD
* Prairie Cardiovascular Consultants, Southern Illinois University School of Medicine, Springfield, Illinois
The Henry Ford Heart & Vascular Institute, Detroit, Michigan
American College of Cardiology, Washington, DC
Manuscript received July 6, 2009;
revised manuscript received July 22, 2009,
accepted July 27, 2009.
* Reprint requests and correspondence: Dr. James T. Dove, Prairie Cardiovascular Consultants, Ltd., 619 East Mason Street, Suite 4P57, Springfield, Illinois 62701 (Email: jdove{at}prairieheart.com).
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Abstract
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Health care reform is moving forward at a frantic pace. There have been 3 documents released from the Senate Finance Committee and proposed legislation from the Senate HELP Committee and the House of Representatives Tri-Committee on Health Reform. The push for legislative action has not been sidetracked by the economic conditions. Integrated health care delivery is the current favored approach to aligning resource use and cost. Accountable care organizations (ACOs), a concept included in health care reform legislation before both the House and Senate, propose to translate the efficiencies and lessons learned from large integrated systems and apply them to nonintegrated practices. The ACO design could be real or virtual integration of local delivery providers. This new structure is complicated, and clinicians, patients, and payers should have input regarding the design and function of it. Because most of health care is delivered in the ambulatory setting, it remains to be determined whether the ACOs are best developed in parallel among physician practices and hospitals or as partnerships between hospitals and physicians. Many are concerned that hospital-led ACOs will force physician employment by hospitals with possible unintended negative consequences for physicians, hospitals, and patients. Patients, physicians, other providers, and payers are in a better position to guide the redesign of the health care delivery system than government agencies, policy organizations, or elected officials, no matter how well intended. We strongly believe—and ACC has proclaimed—that change in health care delivery must be accomplished with patients and physicians at the table.
Key Words: health • education • labor • pensions • Centers for Medicare & Medicaid Services • accountable care organization
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Abbreviations and Acronyms
| | ACC = American College of Cardiology | | ACO = Accountable Care Organization | | CMS = Centers for Medicare & Medicaid Services |
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Health care reform is moving forward at a frantic pace. There have been 3 documents released from the Senate Finance Committee (1) and proposed legislation from the Senate Health, Education, Labor, and Pensions Committee (2) and the House of Representatives Tri-Committee on Health Reform (3). The push for legislative action has not been sidetracked by the economic conditions. In fact, the economy is seen as a driver for health care reform because many view health care costs as having an anticompetitive effect for American business in the global economy.
Beyond covering the uninsured, redesign of the health care delivery system is essential. Patients and physicians have not been served by the cost and volume controls that have occurred during the past decade. The current escalation of health care costs is not sustainable. There are savings that can translate into a better system of care that benefits patients and physicians while decreasing duplication and improving quality and coordination of care. Without true health care reform, Congress will use cost controls to meet the $1.2 to $1.5 trillion needed over the course of 10 years to cover the uninsured. The ideal health care design will require multiple structures and pilots to assess which works best for both patients and doctors. The preferences and needs of patients and physicians are variable from one community to the next. There are concerns that one solution will be promoted over all others. Obviously, one size will not fit all.
The right amount of care and how best to deliver it is uncertain. Medical care is a point-of-care interaction between the patient and a clinician. It is a blend of the observations, fears, and concerns of the patient balanced by the expertise and experience of the clinician. This joint decision making is a balance of the art and science of medicine. At its best, it is exceptional. At its worst, it can include inappropriate care because of knowledge-based deficiencies or even personal financial gain. In truth, it is easier to identify blatant overuse than errors of omission. This is much more complex than simple geographic variation. The goal for the best health care, however, is not harmonization of a utilization map but deciding the right amount of care at the right time. The American College of Cardiology (ACC)/American Heart Association Clinical Care Guidelines and the ACC's Appropriate Use Criteria are designed to determine the right care, whereas ACC registries are designed to measure process and outcomes as steps toward delivering best care. These tools improve quality and efficiency and are not volume targets.
Integrated health care delivery is the current favored approach to aligning resource use and cost. Accountable care organizations (ACOs), a concept included in health care reform legislation before both the House and Senate, propose to translate the efficiencies and lessons learned from large integrated systems and apply them to nonintegrated practices. The ACO design could be real or virtual integration of local delivery providers.
Most integrated systems have developed over time under unique circumstances, but they represent only 15% of the total delivery of health care. Although there are some highly visible and high-quality integrated systems, we don't actually know whether integrated systems are generally better in providing greater quality or more efficient care than many other quality practices in the country. In late June, the Medicare Payments Advisory Commission (4) suggested that the definition of an ACO could resemble large integrated systems that already exist, as well as academic medical centers and physician-hospital organizations. That definition needs to be expanded. Outside the integrated systems, government regulations have made it difficult or even illegal for practices and hospitals to coordinate care and quality.
Because most of the care is delivered by small groups of physicians that are not connected, the challenge is to allow trials of ACOs that are not legal large partnerships or entities. Can this be tested outside of a formal integrated system with a payment system that rewards efficient, quality, appropriate care based on the overall cost of care for a given population?
This new structure is complicated, and clinicians, patients, and payers should have input about the design and function of it. For example, the ACO should reward providers for reducing unnecessary and discretionary services but not denying necessary care. Members of an ACO should not be at risk for costs they cannot control. Although not currently discussed, there will also need to be an outlier adjustment that protects an ACO from unforeseen events.
The Senate Finance Committee (1) recommended that practices should be allowed in 2012 to come together to improve quality, efficiency, and reduce cost. There are several criteria listed for forming such new ACO networks: - 1 A 2-year participation contract;
- 2 A formal legal structure;
- 3 Inclusion of primary care physicians with at least 5,000 patients;
- 4 A list of primary care physicians and subspecialty physicians who are involved provided to the Centers for Medicare & Medicaid Services (CMS);
- 5 Contracts with care groups of specialty physicians outside the ACO;
- 6 Management and leadership structure for joint decision making; and
- 7 Defined processes for promoting evidence-based medicine and reporting on quality, cost reduction measures, and coordinated care.
An ACO could earn incentive payments by reporting yearly on quality indicators, clinical processes, patient satisfaction, utilization, cost, and outcomes. The CMS would assign patients to an ACO based on their primary care physician's affiliation. Then, CMS would permit patients to move from one ACO to another. The cost of moving and attribution of care to the various ACOs is unclear. In this structure, physicians would initially be paid on a fee-for-service system, although the proposal from the Senate is expected to evolve toward a new strategy, such as bundling of episodes of care or capitation.
Capitation, however, is mainly a cost-control model, unless future models were accompanied by registry-based measurement and continuous quality-improvement systems that could effectively protect against undertreatment and/or less-than-appropriate care. Without this, capitation is no more a quality of service model than the fee-for-service system. In fact, it is easier to measure the use of services provided than it is to measure the lack of services that should have been provided.
The current fee-for-service system, in turn, has experienced severe cuts during the past 10 years and inadequate adjustments even for primary care providers. The recently proposed cuts by CMS for 2010 are draconian. The status quo, therefore, is not a winner for efficiency, quality, coordination, or reimbursement. The profession needs to make sure on behalf of our patients and physicians that any proposed delivery system changes are achievable, patient centered, evidence based, and likely to promote patient satisfaction and practice viability. There needs to be legislative language that permits experimentation of various ACO models.
If an effective ACO model is developed, an actuarially sound baseline of expected costs would need to be determined for the preceding 3 years' cost for each beneficiary for both Medicare Parts A and B to track performance against a credible cost target. To risk adjust such a target fairly, a denominator of patients >5,000 will likely be necessary. The current articulated goal would be to reduce cost by 2% less than the previous benchmark period, with the ACO receiving 50% of the savings beyond the 2% budget-reduction target. This point is purely an arbitrarily set one that in the current Medicare Demonstration Project (4) resulted in a 60% failure in cost reduction despite a 96% success rate in meeting quality measures. A better goal would be to improve risk-adjusted quality and efficient care in all practice settings and reward ACOs for having met those quality targets as well.
What is also unclear about the ACO model is what will incentivize participation and reward quality improvement when system improvements have wrought much of the current waste out of the system. Ideally, this is what should happen, but the success of the ACO model, as currently considered, will eliminate most of its future payment incentives. On the basis of the decade of flat payment and disincentives for quality, the sustainable growth rate experience correctly raises concern about long-term implications of an ACO experiment. One possible goal might be to convert long-term ACO rewards to gain-sharing around annualized network-produced reductions in cost increases compared with annual medical inflation or actuarialized expected cost projections.
In this scenario, if regional health care cost inflation were to increase 5% above the gross domestic product (or expected cost increases), and a given participating network holds their cost inflation to perhaps 3% during the same time period, they might keep 80% of the "gain-share." A second ACO reward system needs also to be developed around parallel improvements in clinical outcomes—it should not just be about relative cost improvements. However, no long-term strategy has been proposed for ACO incentives beyond going after the current system inefficiencies, which is a problem. Given the sustainable growth rate experience, "trust us" will not suffice as a strategy.
It is clear that health care delivery needs to become more efficient, promote continuous quality improvement, and foster better coordination of care. Efforts that promote those tactics within a community or region are needed and worthy of focused consideration. There are, however, many unanswered questions related to today's new ideas about delivery system and payment reform. A few of those are: - 1 Attribution of services when the patient moves from one ACO to another;
- 2 Setting benchmark cost targets;
- 3 Recalculating the baseline cost in subsequent years;
- 4 Adding quality improvement as an additional component of the reward system;
- 5 Legal issues around creation of a collaborative organization to improve quality of care in a virtual integrated network;
- 6 Determining the proper size for an ACO to be sure there is an adequate patient base for legitimate risk adjustment and cost targeting; and
- 7 Determining what variations of the model will be necessary in different geographies and circumstances.
For patients, the structure looks initially attractive, but some questions should be considered before widespread acceptance:- 1 Will improved quality, efficiency, and coordination of care occur?
- 2 Will there be real patient choice of ACOs in a given geographic region?
- 3 Will patients keep access to their primary care physician, or their specialist(s) of choice?
- 4 Should patients be concerned about the potential rationing of care and stifling of innovation?
- 5 If ACOs become conflicted as future cost controls are put in place, will the decreases in benefits or care be appropriate?
For physicians, some questions are as follows:- 1 Can we effectively organize virtual networks across competitive practices?
- 2 Can we hold those networks together as we collectively work to improve quality and efficiency? What kinds of governance structures will be necessary?
- 3 Will health care information technology deliver on the expectations of improved quality, efficient use of resources, and coordination of care?
- 4 Are we willing to accept that the goals are worth pursuing, despite the likely difficulties in successfully transitioning from the current delivery structure to the new structures?
- 5 Are longer-term incentives enough to warrant the risk of transitioning to new structures?
Physicians and patients must work together to establish the correct operating principles of an ACO or variations of that concept. Because most of health care is delivered in the ambulatory setting, it remains to be determined whether the ACOs are best developed in parallel among physician practices and hospitals or as partnerships between hospitals and physicians. Many are concerned that hospital-led ACOs will force physician employment by hospitals with possible unintended negative consequences for physicians, hospitals, and patients.
Patients, physicians, other providers, and payers are in a better position to guide the redesign of the health care delivery system than government agencies, policy organizations, or elected officials, no matter how well intended. Therefore, they need to be provided with the tools, the latitude, and the support to participate centrally in system redesign. Experimentation should be encouraged.
We strongly believe—and the ACC has proclaimed—that change in health care delivery must be accomplished with patients and physicians at the table. Past policies and the status quo have failed. Bold new solutions are necessary. Berwick in a recent New England Journal of Medicine article (5) stated, "Physicians can wait and see or they can decide to lead." We agree, and we believe that professional societies and clinicians need to accept the challenge to lead. Although there are risks before us, we have greater opportunities than perhaps ever before to rejuvenate the profession in the challenges ahead.
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References
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1. Description of Policy Options—Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care CostsSenate Finance Committee, April 29, 2009 http://finance.senate.gov/sitepages/leg/LEG%202009/042809%20Health%20Care%20Description%20of%20Policy%20Option.pdfAccessed July 29, 2009.2. Kennedy HELP Committee Bill (615 pages) To make quality, affordable health care available to all Americans, reduce costs, improve health care quality, enhance disease prevention, and strengthen the health care workforce http://help.senate.gov/BAI09A84_xml.pdfAccessed July 29, 2009. 3. Tri-Committee Health Reform BillJuly 14, 2009 http://docs.house.gov/edlabor/AAHCA-BillText-071409.pdfAccessed July 29, 2009. 4. Medicare Physician Group Practice Demonstration. Physician Groups Continue to Improve Quality and Generate Savings Under Medicare Physician Pay for Performance Demonstration. Centers for Medicare & Medicaid ServicesAugust 2008 http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/PGP_Fact_Sheet.pdfAccessed July 29, 2009. 5. Fisher ES, Berwick DM, Davis K. Achieving health care reform—how physicians can help N Engl J Med 2009;360:2495-2497.[Free Full Text]
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