Public Policy Contributor Brad Flansbaum writes…
I follow the literature on Accountable Care Organizations (ACO) because of its topical nature and its promise, as well as how it may fast track needed change in our healthcare delivery system. I have written on this subject once before, and wish to return to it.
A Google search of ‘Accountable Care Organization’ published within the last 4 weeks returned 1.3 million hits. In the result leads, phrases such as “promising,” “reduce costs and improve quality,” “hottest topic in reform,” abound. Hospitalists acting as the fulcrum coordinators of inpatient care will play more than a minor role in any pilot or demo, and it is not accidental that the SHM Public Policy Committee is discussing next steps. In addition, as adjuncts to this ACO discussion, we are dissecting payment bundling and value-based purchasing, which in essence, are continuums of the same concept.
A recent Health Affairs article, one of many published in the preeminent policy journal within the last year, reminded me of something I have tracked for the same period: the disconnect between theory, and the actual number of sites engaged in anything remotely resembling the systems that need formation. It does not hurt that heavyweights such as Elliott Fisher, Mark McClellan, Stephen Shortell, and others are throwing their endorsements and intellectual firepower behind the movement to bring these systems to fruition.
Much in the same fashion of Patient Centered Medical Homes, ACO’s will likely have qualification tierings that progress them up the risk-reward scale based on their level of integration, efficiency, etc. A tier four system might resemble Kaiser Permanente, whereas a tier two might resemble an IPA, hospital, and SNF playing nice together in a limited way to produce some shared savings (see figure below).
The AHA numbers 5800 hospitals in the Unites States. Of that total, I wondered, how many are engaged in an ACO type arrangement, or better, close to collaborating with other entities to move in a direction like those above. I searched, and as there is no ACO professional association (although, see here, and here), and no federal registry, I could not determine numbers. However, if references to “model systems” are any guide, beyond the usual suspects (Geisinger, Mayo, Intermountain, Kaiser, etc.), and a handful of lesser known beacons of bright lights scattered about, maybe the number of functioning ACO-oid type arrangements are a few dozen (or hundred to be generous). Regardless, it is safe to say <1% of hospitals are living in that world, and it safer to say the rest of us are a tad few years away from getting there.
It is also discouraging to read the full body of ACO literature, and unlike some issues where opinions range far right to left scattered throughout countless publications, the same dozen or so papers (and equal number of authors) continue to surface without much variation. If I evaluate an analysis on reform, invariably the term ACO will appear—and almost certainly, I can cite the references blindly without much effort (not because I am smart, but because when you have more fingers than substantive papers on the subject, it is not that difficult).
Almost as frustrating, and yes, sounding a bit curmudgeonly, begin any workgroup on ACO/bundling and there is an encouragingwhite cloud overhead. Invariably though, as the group tumbles through the weeds, so many obstacles, stumbling blocks, and intangibles begin to crop up, that before you know it, you are not discussing ACO’s, but wholesale payment, delivery, provider, and patient reform. In short, PPACA 2.0, 3.0, and 4.0. Think I am kidding? Just ask a group of hospitalists (or ER docs and intensivists), “who controls the money in any ACO?” If you have half a day on your hands, listen in. Another rub: discuss CHF, DM, or COPD bundles within ACO integration as opposed to hip repair, CABG or PCI, and you might as well make it a full day. It is that complicated.
Also, after reading the April 2010 MedPAC report—along another vein, I noted the commissioners voted 17-0 to cut $3.5 billion from the indirect GME adjustments teaching hospitals receive, making its receipt contingent on meeting educational benchmarks (“P4P for training programs”). Integrating endeavors such as that, with all the other pieces of reform—including HIT that allows systems to track and convey what needs oversight and reporting—is years away. The recent release of meaningful use EHR guidelines, and in my opinion, a reasonably justified pushback from the docs and AMA, a rarity—even after first release modifications—is a testament to how slow and difficult a transformation we have before us. I am not crying U-N-C-L-E, but Dunkirk comes to mind in thinking this undertaking through. There are dozens of other snags of this sort just waiting to ensnare participants, and they are not minor. The legal framework alone is worthy of half a bottle of aspirin.
Additionally, with all the attention this subject is getting, you would contemplate the savings are more than minor. Every cent counts, but the CBO scoring of bundled payments at least, amongst the most promised group of potential interventions, leads the pack at ± 5%. There will be great variation naturally, and the CBO is conservative and often incorrect in its estimates, but as a best guess, not as impressive an outcome as one would expect. It is not the panacea, but just another tool in a very large toolbox:
In winding up, and on a more optimistic note, the playing field is not a completely barren. I recently read about a new entity: Transforming Health Care. It is a large “virtual” partnership of hospitals, doctor groups, health plans and consumer advocates within the California health-care system joining in an attempt to realize significant savings. These kinds of experiments are encouraging, but scalability is the unknown, nevertheless hope springs eternal—especially when builds such as this go down in big cities.
The issue will be whether these trials are just an illusory blush on the rose—and will propagate what may be a Sisyphean notion—or a true breakthrough on which we can plant seeds. I am betting on the former unfortunately, and my wager is the ACO will not materialize countrywide, and will find only limited success. I hate to admit it—so much has been vested in the model—but I often think this is another example in a long line of healthcare facades in the guise of the emperor’s new clothes. However, I do believe it will have its niche triumphs a la Kaiser and Puget Sound in focused regions of the country. Stay tuned though, and you can bet SHM will be there surveying and weighing in on this topic for a time to come. In the meantime, we can sit back and watch this ACO-like experiment play out and take notes. I am sure Don Berwick and the GOP will be studying carefully—because things are sure not progressing as planned in Massachusetts.