Accountable Care Sprints Ahead

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A recent report from the Oliver Wyman consulting firm – The ACO Surprise – argues that accountable care organizations are on the verge of triggering a major transformation of the U.S. health system. I hope this prediction comes true.

For all the complexity of ACO regulations (set forth in a 190 page Federal Register document), in my view ACOs make four basic commitments:

  1. Taking responsibility for helping a population be as healthy as possible
  2. Connecting specialties, disciplines, and sites (hospitals, rehabilitation, nursing homes) in a coordinated manner
  3. Engaging patients as active partners – ideally leaders – in promoting their own health and guiding their treatment
  4. Accepting payment for producing valuable results for the population, not on a fee-for-service basis for the individual units of service rendered

Here’s the Oliver Wyman view of the near term ACO landscape:

  • There are 2.4 million current Medicare ACO patients.
  • Medicare ACOs have 15 million non-Medicare patients. The report predicts that they will move towards caring for their 15 million non-Medicare patients in the “ACO manner.”
  • The report predicts that non-Medicare ACOs will care for 8 to 14 million patients.

If Oliver Wyman is correct, it won’t be many years before 10 percent of the U.S. population receives its care in accord with the ACO philosophy. Insofar as ACOs are successful in creating more value for patients per dollar of investment, they’ll come to dominate the marketplace.

With my physician hat on, I see the ACO vision as embodying the fundamental values that motivate most clinicians. The reason I joined the not-for-profit Harvard Community Health Plan practice in 1975 was because it was organized around those values. Many, perhaps most, older physicians whose careers have been in solo or small group practices compensated on a fee-for-service basis are unhappy with the ACO movement, but medical students and young physicians are much more positive about group practice, global payment, and salaried compensation.

With my patient hat on, I’ve chosen to have my own medical care from one of the 32 participants in the Pioneer ACO initiative under the Affordable Care Act. I want my doctors, nurses, and hospitalists (if I come under their wing in the future) to collaborate in what they do with, for, and to me. I don’t want any incentives for overly aggressive treatment to influence their recommendations.

Some years ago a patient of mine was in a severe state of psychiatric crisis. The long-term problem was a major psychiatric ailment, but the immediate challenge was getting control of acute alcohol abuse. I made what felt like a zillion telephone calls (this was before all parties used a shared electronic medical record) to alert all those likely to be involved with my patient to the clinical situation and what I was recommending. A week or so later my patient reported,  with appreciation, “I spoke with nine different people last week and they all said the same thing about alcohol – there must be something to it . . . .” The crisis subsided.

From the perspective of clinicians and patients, care delivered in accord with the first three ACO commitments listed above feels right. The three commitments meet patient wishes and reflect the underlying ideals of the health professions. The fourth commitment is what matters from the economic perspective. I share CMS’s belief that doing the right thing in health care will end up saving money. But that will be a happy result of ACOs, not the reason for going down the ACO path.

James Sabin, M.D., 73, is an organizer of Over 65 and a clinical professor of psychiatry at Harvard Medical School.


5 Responses to “Accountable Care Sprints Ahead”

  1. Ted Marmor

    Jim, I share your approval of the aspirational commitments you cite for ACOs. But, I am very worried that this movement will not satisfy those commitments because the financial inducements will dominate. That is the basis for the ironic title of a paper Jon Oberlander and I published in the JGIM “From HMOs to ACOs: the search for the hold grail in American health policy”. ACOs illustrate the use of persuasive definitions just as HMOS did. You do not produce accountability by a label just as satisfying the HMO requirements in the mid-1970s did not produce organizations that embodied attention to maintaining health. I share your hopes, however. Maybe I have become too jaded, however.

    • Ted Marmor

      Jim–a perfectly sensible and thoughtful response to my fears. Evaluating the performance of what is done under the ACO label is precisely the point. Thanks. Ted

  2. Jim Sabin

    Hi Ted –
    I thought the article you and Jon Oberlander wrote is a gem. (I summarized it on the Over 65 blog on October 12.) You’re certainly right to worry about how ACOs will develop. There’s no doubt that some will be financial scams dressed up as the latest and best innovation. But I’m optimistic about the potential because the concept of the ACO embodies the core values that motivate our best health professionals – integrated, evidence-based, cost-effective care that’s provided in concert with the patient’s family and community environment. I think the right stance for us to take towards ACOs is to learn from and publicize the admirable examples and to chastise the faulty versions. In that view I follow what Carolyn Clancy and Howard Brody suggested in their 1995 JAMA article: “Managed Care – Jekyll or Hyde?” They concluded, as you and Jon Oberlander did, that the HMO label subsumed both, and recommended the labels “Hyde care” and “Jekyll care” to make distinctions the marketing label of “HMO” glossed over.

  3. David Levi

    The values you cite for the ACOs seem right to me and seem to offer the best chance for good medical care for the population at large. However, personally, I like to be able to seek the best practitioner I can find by referral from other doctors I trust for whatever my condition or my family’s might be. So far, enough doctors take Medicare and Medigap for this to work That’s the old system which could become unworkable, but I wouldn’t give it up if I didn’t have to. I suspect I am like many used to the old system. Hopefully, younger people will start with ACOs and like them. I doubt coercion generally can get past political barriers. What incentives can substantially expand the ACO model?

  4. Jim Sabin

    Hi David –
    I agree that it’s natural and wise to want to get the best care we can when we’re in need. And “choice” is a core American value! Under ACO regulations, patients retain the right to go outside of the ACO. But there will certainly be tension between the financial incentives that encourage physicians to keep care within the ACO and the sentiments you describe that will lead patients to want to go outside of the ACO. That tension will motivate a well led ACO to improve its areas of weakness. I’ve worked with a number of ACOs on “anticipatory ethics” – scoping out the clinical/ethical conflicts likely to emerge and planning for how to respond in the best way. FYI, here’s a hypothetical case I’ve used in some of those ACO consultations:

    “Mr. Adams needs a complex surgical procedure. Dr. Johnson, his PCP, has recommended Dr. Jones, who is part of the ACO network. Mr. Adams says – “I want to see Dr. Smith in Boston. He’s the recognized expert in what I need. He’s done more of the procedure than anyone else. What matters more to you – my care or your budget?” Dr. Johnson believes Dr. Jones is a competent surgeon, with good skill for doing the procedure, but shares Mr. Adams’ view that Dr. Smith is the national expert. If Dr. Johnson asked us for consultation about (a) how to think about the situation and (b) how to handle it, what should we advise?”

    Now that more than 100 ACOs have been launched, it’s crucial for the U.S. to learn from the successes and figure out how to avoid the failures.