Sunday, October 20, 2013
Too Soon Old
Too soon old, too late smart is the old saying. It applies to me when it comes to Accountable
Care Organizations (ACOs).
ACO’s are provided for in the Affordable Care Act, a.k.a.
Obamacare. I assumed they described an
organizational structure that could be held accountable for cost and quality
because it included all the major components of care (particularly doctors and
hospitals). I was puzzled by the kinds
of organizations that elected to be included, as well as by the kinds that did
not, but thought that was just part of the fuzziness that typically
characterized public programs.
I was particularly mystified when I learned that the Henry
Ford Health System in Detroit (where I worked during the 1990’s) had not elected
to be an ACO. HFHS is a fully
integrated system that includes hospitals, a salaried medical staff and a
good-sized HMO.
Inquiring into that with a friend who still works there, I learned
that the term ACO actually describes a financial scheme directed at providers
that are financed primarily by fee for service.
If they elect to join, Medicare identifies the patients that are using
them for primary care. If those patients
end up costing Medicare less than average and if certain quality goals are met
or exceeded, providers get part of the savings.
If they cost more and fail to meet quality goals, providers get
financially penalized. Providers can
elect different levels of reward and penalty, based on how much risk they are
willing to expose themselves to.
So it is a game of sorts and providers decide whether they
want to play or not. Quite a few have
taken the challenge but many have not.
The obvious intent is to incentivize providers to improve
quality and control cost. The
organizational implications are presumably that efforts to do that will lead
providers to more highly integrate the elements of care so that they can be
held “accountable” for cost and quality.
We’ll see if it works.
