Accountable Care Organizations (ACOs) are supposed to control costs and improve quality under the Patient Protection and Affordable Care Act. Everyone seems to be maneuvering toward creating or participating in an ACO, even if no one is quite sure what exactly they will be. From what I observe these are mainly going to be extensions of hospital-dominated integrated delivery networks taking global capitation and getting bonuses for quality.
Two articles in the latest New England Journal of Medicine reinforce my pessimism about these entities.
In Physicians versus Hospitals as Leaders of Accountable Care Organizations, the authors discuss whether hospitals or physicians will lead ACOs, pointing out that whoever is in the lead will emerge financially stronger, weakening the other group. The authors make it sound like a toss-up over which side will control ACOs. The authors note that doctors will have to overcome barriers including collaboration and divvying up resources among primary care and specialists. They will also have to invest capital in information technology and other infrastructure. Hospitals meanwhile will have to trade short term revenue for long term growth and focus more on outpatient services.
I think the hospitals will overcome these barriers a lot more readily than physicians. I expect hospital-led ACOs to bulk up with acquisitions and affiliations to improve their negotiating position with payers. In many markets one player will dominate, which won’t be good for costs.
The other article, Patients’ Role in Accountable Care Organizations points out that patients won’t be assigned to a particular ACO explicitly, and suggests that policymakers create incentives to keep patients within one ACO. They suggest tiered networks, lower premiums for patients who choose a given ACO and assigning patients to certain ACOs as a default choice. All of these things should make ACOs more efficient. But as the authors point out:
Although minimizing “leakage” of the population for which an ACO is accountable may be important for coordinating and integrating care, there will always be some patients who would obtain more effective care by turning to multiple ACOs. More than half of Medicare beneficiaries have five or more chronic conditions that may be treated separately or in combination. Although some successful integrated systems provide efficient, high-quality care for multiple conditions, often the best cardiac care providers in a given market, for example, are not in the same system as the best orthopedic care providers.
Nevertheless the authors seem to think it a good idea to keep patients within a given ACO.
IDNs I’m familiar with already do a lot to prevent so-called “leakage.” My primary care provider is part of BIDMC/CareGroup and has strong financial incentives to refer within the system. In addition, non-interoperable information technology is used as a barrier to going outside. In my case that’s been fine but it means that plenty of patients are never told about choices outside the IDN that may be better in their specific instance.
What I’d prefer as a patient would be a virtual ACO. A concierge-style primary care physician practice would be paid to guide my care. My PCP would be able to work with any specialist, hospital or lab in Boston (or elsewhere) that he thought best for me and would have the right set of tools to help me choose where to go and what to have done. Seamless integration of electronic health records –with a focus on my personal health record– would make it possible to move around without crippling the ability to share my medical information. That kind of approach would start to starve the specialists and hospitals of easy revenue and might force them to compete on efficiency, quality and customer service. My PCP would receive risk-adjusted capitation for my care and bonuses based on optimal use of resources and my level of satisfaction.
Sure that’s hard to define and operationalize, but I’d take it any day over being forced into one IDN where it’s considered “leakage” if I go elsewhere.November 10, 2010