Is bigger better? Accountable care organizations and the political economics of healthcare

Recent conversations around health care reform have centered on the millions of Americans without health insurance. Now the conversation has expanded to broader considerations concerning patient safety, gaps in quality, soaring costs, and a system and structure that is having difficulty addressing any of these problems.

One model, accountable care organizations (ACOs), has gained momentum as a way to improve care and reduce costs. In fact, the development of ACOs has already been written into the 2010 health care-law.  According to Dr. Elliott Fisher, a Medical Professor at Dartmouth and also one of the movers and shakers of this model, an ACO is a group of physicians, hospitals, and other providers who come together to coordinate and take responsibility for the care of a defined population of patients. This organizing group will be rewarded if they improve quality care and if they slow the growth in health spending. But as desirable as ACOs look and sound, the implementation of them requires an entirely different way of organizing and designing health care, including the very way people interact and make decisions in health care settings.

So is the ACO model viable and sustainable?

As the U.S. population continues to age and get sicker, ACOs not only make a lot of sense but have proven to be effective in lowering costs and increasing quality, even though data is limited.  Caring for complex conditions and patients as well as patients who are older for instance, often involves the engagement and coordination of multiple professionals across different settings. Deadly gaps in care for these patients are often attributed to poor coordination, poor communication, lack of longitudinal care and faulty transitions. In an ACO model, organizations will create incentives that ultimately reward groups for coordinating (instead of controlling) effectively among specialists, primary physicians, patients and families. For these reasons, many believe that ACOs are a game changer in the “perfect storm of healthcare.”

Some are more resistant, however, claiming that ACOs will be a repeat of HMO economics and will do everything to increase cost while restricting patients and providers from having a say in the way they receive and provide for health care. Further yet, opponents argue that ACOs will become an “assembly line health care” system.

However, no matter where you stand, one thing is clear: there is very little strong evidence on which features are most likely to lead to success in specific circumstances, or how ACOs can best interact with other reforms underway.  Individuals on both sides wonder whether the values that originally fueled the concept will remain when organizations – with their own unique value systems – integrate them. The Center for Population Health at the Dartmouth Institute for example, underscores that ACOs will look very different as a variety of provider collaborations become ACOs. But they point out that a few characteristics are essential. These include:

·     Able to provide or manage the continuum of care as a real or virtually integrated delivery system
·     Large enough to support comprehensive performance measurement and expenditure projections
·     Possess a formal organization capable of internally distributing shared savings payments and prospectively planning budgets and resource needs

These essential characteristics are challenging even to conceptualize, let alone implement. So what are the most important challenges to ACOs?

According to a HealthAffairs article, there are specific challenges:

·     Providing timely data and useful performance measures
·     Overcoming transition costs
·     Gaining consumer support
·     Learning what works – and what doesn’t – to inform policy and practice
·     Clarifying and reinforcing the road forward.

So how can organizations work through these challenges? The National Institute of Health Care Reform has identified five strategies:
·     Enhance physician involvement
·     Improve incentives
·     Infrastructure support
·     Flexibility in ACO policies and implementation
·     Supportive leadership and communication

As the ACO model continues to gain momentum, how we talk about them matters, who we include in the conversation matters, and how we listen to others and learn from each other, also matters. Identifying best clinical practices for low-cost and high-quality care outcomes is also part of the  collaborative and responsive attitude embedded in the ACO model.

So how are you designing practices to make your organization more accountable?

Thanks to tom chandler, T100Timlen and Al_HikesAZ for the images!







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One Response

  1. Good question – will alternative healthcare delivery and payment models contain costs and improve quality? First case studies indicate they might, but it’s too early to declare victory.

    So far only a few pay-for-performance systems have succeeded in achieving the dual goal of containing healthcare costs and enhancing outcomes, and the jury is still out on the long-term impact. Many have failed to produce more than marginal improvements in quality or efficiency, and a few have actually suffered from unintended consequences, causing costs to rise or quality to suffer.

    For those who are interested, more discussion of ACO opportunities and challenges can be found here:

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