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Monday, September 20, 2010

The Brave New World of Accountable Care Organizations

Brave New World for Health Care in America
Recently I attended a health care conference, sponsored by ECG Management Consultants, on the impact of accountable care as mandated by new government regulations for quality and transparency. An accountable care organization is a clinical group that receives a patient management fee from Medicare in exchange for improved patient oversight and quality standards. In short, this is pay for performance, not only for procedure. All of the panelists at the conference were in agreement that the health care paradigm has shifted irrevocably. There was much discussion around organizational adaptation for integrating quality measures in reporting and contracting, including one from a clinician in attendance, who decried the poor reimbursement for solo primary care practitioners. Essentially he was told that only clinicians whose model meets the new requirements for reporting and care metrics will be able to adapt. Wow, pinch me, did someone running a health care organization really say that in public? This is definitely the first time I have been in a conference where all of the experts were in agreement and publicly stating the old model for doing business in health care is dead, which is to treat and bill for services, based on usual customary and reasonable charges. It is no longer adequate to do a good job with your patients; you have to be able to demonstrate that with your quality metrics. Certainly some clinicians will choose to retire, others will join larger clinics to be able to compete, and some will be the leaders in this adaptation. The Everett Clinic comes to mind, a leader for decades in the provision of affordable care to a diverse patient population, and with excellent quality measures, as reported by Leapfrog and other quality watch dogs.

The medical community, as represented at the conference, is anxious to adopt a new compensation model beyond the fee for service practice and though it will be a process of adaptation to include medical home and other primary care provisions into a reimbursement model, it is happening. The accountable care organization provisions encourage health care entities to reduce waste, provide measureable improvements in care, and improve the end stage of life care process. The first article I wrote in my health care column in 2007, was about end-of-life-care and the impact on the patient as well as the cost to society, with my brother as the benchmark for the shift away from prolonging life regardless of quality.

Conference speakers from Monarch HealthCare, Brown & Toland Physicians, The Everett Clinic, and Premera Blue Cross were in agreement on the following principles derived from the recent health care reforms:
1.Health care decisions will be driven by the individual and less so by the corporations.
2. We are going to have to provide a lot more care to an aging population for less money.
3. The system has to make meaningful cost management changes.
4.One of the big costs that need to be confronted is inappropriate end of life care due to the absence of medical directives, lack of palliative care programs, and general lack of awareness on the part of patients.
5.Other cost vectors that need to be controlled are reducing unnecessary procedures, allocating technology more efficaciously, and reducing excessive administration costs.

Government Processing Speed

Concerns raised by this group of health care administrators include the speed with which the Center for Medicaid Services, CMS will be able to process all of these changes. It took a year and a half for them to measure the Everett Clinic’s results in a demonstration project. Since the scale and degree of health care changes are significantly greater with the 2010 health care reforms, one has to wonder how many years it will take for the reporting to occur, let alone system integration.
New Medical Model
The model for an effective health care delivery organization will have to include these criteria to succeed in the new health care environment in the United States:
1.Clinically integrated multispecialty physician networks
2 An economic model to manage risk and deliver patient value
3.Immersion in evidence based medicine
4.Successful communicators of their value
Benchmarks for America’s New Health Care Program
The United States’ ability to compete for goods and services on a global scale demands a more efficient health care system, because we cannot continue to spend 20% more than everyone else for health care. Several countries have managed private insurance programs for the provision of health care including; The Netherlands, Switzerland and Taiwan. The USA would be wise to observe how these models function and to adapt best practices. One thing that is clear, despite the catcall for subsidizing health insurance costs, these other countries provide subsidies, up to 40% of the premiums, depending on the income level and location of the enrollee. So to all of the whiners who criticize insurance subsidies for the middle class, if you want an inclusive national medical program using private insurance, this is a mandatory element, so get over it! It is in the best interest of everyone for the focus to remain on how those dollars are spent and on the value we are getting for improved health care, for example, managing hypertension to reduce the incidence of kidney dialysis, which costs a minimum of $50,000 per patient. If we improve our health care model and deliver care more efficiently we can bring down the relative per capita cost of health care over time.


Anonymous said...

This is a timely subject matter. I have been re-working oncology care models for the past year in order to start thinking outside the box on how to adapt to this new shift. Some of the difficulties still lies with making changes before the reimbursement model kicks in. One thing is for sure, those who continue "business as usual" will be on the losing end as the new world order demands everything change! It is an exciting and challenging time for healthcare.

healthpolicymaven said...

Thanks for the insightful comment, I completely agree that the reimbursement model has to change along with the patient requirements, but CMS is not exactly light on its feet. We are in the process of a major shift in our provision of health care and it is going to be a slog for a while.

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