The new reform laws raise more questions than they answer. One particular question was asked a lot at two national conferences I attended last week: what’s an Accountable Care Organization? Policy-makers seem to be placing high hopes on ACOs—integrated and aligned systems where all who care for an individual patient are at risk for delivering care of defined quality as inexpensively as possible [my definition].
Countless health care leaders will attend conferences over the next year to see if becoming an ACO is the key to their organizations’ survival under “ObamaCare.” I’ll step out on a limb and argue that becoming an ACO will be critical to the future success of most providers. I really like the general concept. However, I fear for three reasons that it will do more harm than good if the bureaucrats define ACO too narrowly when they translate Congressional intent into regulations.
First, the rule-writing process will take years. Very few health care organizations can afford to wait for the “feds” to tell them how to qualify for financial incentives that may ultimately be directed to ACOs. Integration is imperative now. The American economy cannot continue to support the waste that fragmentation generates in our health care delivery system.
Second, an ACO must integrate more than hospitals and physicians. To deliver the full benefits of alignment, an ACO must encompass key economic units on the supply and demand sides of a medical marketplace—accountably and transparently. In my view, a successful ACO will not only put doctors and physicians on the same balance sheet, but also bring payers, purchasers, and patients into the mix.
Third, competition between ACOs is needed to produce the full benefits of multi-stakeholder integration. I am concerned that regulations will turn the solution into a problem. A “one size fits all” definition of ACO would stifle the competitive innovation and diversity that caused Congress to favor ACOs in the first place. For example, Kaiser-Permanente and the Geisinger Clinic are two of the highly integrated delivery systems examined by Congress, but they achieve their impressive successes in different ways.
I fear bureaucratic rule-making will produce a narrow definition that excludes different paths to acceptably accountable care. (It’s happened before. Kaiser-Permanente ultimately chose not to seek designation as a federally qualified HMO under the 1973 Health Maintenance Organization Act that was based on the Kaiser model.) So what’s an ACO? It is a new and improved delivery system engineered to produce efficient and effective health care through partnerships of all key players in local markets. Ideally, ACOs will be as different as the marketplaces they serve. The less the concept is standardized beyond its generic attributes, the better.
How would you define an ACO? Is your health care organization ready to rise to the challenge now, or are you waiting for the Secretary of HHS to define it for you later?
3 comments:
I agree with the need for action sooner rather than later -- after regulations are written. Hopefully ACOs will provide hospitals with a mechanism to address events that they are already, or soon will be, held accountable for (e.g., "avoidable" readmissions) but over which they now have only partial control at best.
Jeff,
Does the possibility (or threat) of the Supreme Court accepting the "legislative veto" indicate anything about the direction of how complex
directives loaded with great administrative discretion will impact on health care, inter alia?
RWEcon87@gmail.com
It sounds like a GPO of sorts (group purchasing Organization), but like you state there are many GPO’s and because there is it creates the needed competition you so aptly stated. The GPO’s in this case allow some smaller businesses to use group buying power that they would not have being a smaller entity.
At that level it makes sense to create ACO’s otherwise you are just looking at more people with their hands in the cookie jar trying to find a way to get more cookies. That would not save money at all except for crafty people to find a way to funnel more money to them somehow…this is a regulation nightmare Jeff. No one right now trusts politicians and rightly so and they are the chuckle heads that are going to write the rules. A sure fire guarantee, that it will benefit them somehow or some special interest group like a union.
Too much control and apparently at the government level is really bad. Take the post office that everyone always brings up. The definition of insanity is to do the same thing over and over and expecting a different result (this applies to Amtrak too).
So you are dead on in your analysis.
I think part of the solution is done by the individual States themselves. This brings us back to states rights again too. They give us some guidelines to operate under, and then hospitals, MD’s, Pharmacies etc form ACO entities. These alliances have already started. I know of MD’s that could no longer stay in business as a solo practice so they have gone back to the hospital to work…
Great stuff Jeff. It forces me to think outside the box on several levels.
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