It’s definitely not about the bike – but is it even about ACOs?

One of the major features of the Affordable Care Act (ACA) is the idea of Accountable Care Organizations (ACOs). The final regulations from Medicare were issued in October, 2011, so the creation of ACOs seems to be moving forward. ACOs will be groups of primary care doctors, specialists, hospitals, and possible other providers who act together to provide comprehensive care, and receive either more money from Medicare (and probably, eventually, other payers) or, at least, smaller reductions in payments. The only thing that is definitely required to form an ACO is a group of primary care doctors, but since groups of primary care doctors rarely have sufficient capital to fund the necessary infrastructure, so it is likely that almost all will include at least one hospital.

The stated purpose behind encouraging ACOs is to increase quality. It is easy enough to see how quality could be improved in our non-system of health. Because the bar is so low, there are tremendous opportunities that come from lack of organization and coordination of care. Hospitals get paid for caring for people who are admitted. Thus, up to a point (the point at which payments do not exceed costs), they want admissions. Patients prefer to stay healthy, or at least healthy enough to not have to be admitted to the hospital, and hopefully their primary care doctors support this goal. Hospitals have already started being financially penalized by not receiving reimbursement from Medicare for readmissions for the same problem they were discharged for, or complications of that problem. Managing this issue will require the ACO to have not only financial relationships with primary care doctors, but often with long-term care facilities as this is where patients are discharged to – and return to the hospital from.

Fisher, McClellan, and Safran, in their New England Journal of Medicine article “Building the Path to Accountable Care”  (December 29, 2011; may require subscription)[1], identify five “challenges” to implementing ACOs with suggestions for how to overcome them. The challenges are providing timely and useful data, overcoming transition costs, gaining consumer support, learning what works and using that knowledge to inform policy and practice, and clarifying the path forward. Their suggested approaches to solving them are largely based upon what is being done in existing integrated health systems (such as Kaiser and Geisinger). This makes sense, as these systems were the model for ACOs and are often relatively cost effective, but it will require major restructuring for other such systems to develop in ways that can work as well. The authors do not address a major challenge for ACOs, which is that every patient will be identified with a particular ACO (based on the physician from whom they receive the majority of their primary care) and that ACO will be held financially responsible for that patient’s costs, but that the patient will be free to receive service from outside that ACO. This is a political decision, intended to avoid the criticism that the ACO program is just “managed care” in new clothes by ensuring that the program will not “restrict” people. Of course, it is a huge flaw. If a patient is not happy with the care they receive from members of their “identified” ACO, whether that is for “good” reasons (denying unnecessary, excess, risky procedures, hospitalizations, etc.) or “bad” reasons (less than the best quality), the patient can go elsewhere and receive that service from someone else. And if Medicare deems it unnecessary or excessive, it is the “identified” ACO that will receive the financial penalty, not those providing the service.

The authors’ final challenge, the vaguely worded “clarifying the path forward”, is about future changes, including (from their table) “Create meaningful alternatives to fee for service for all providers.” This is a good idea, and not a new one. It means that rather than have the provider (hospital or doctor) paid for each particular service, the payment is tied to something else. Most simply, it could be a global fee for providing care to a patient, as the capitated payments in traditional HMOs. This allows practices to budget their resources, and also allows patients to get care in the way they need it. If a doctor is being paid a set amount in advance, there is no financial incentive for them to require a person to have to take off from work, travel, park, and wait to be seen when that person has a question that can be answered by phone or email. You would only have to be seen in person if either you or the doctor thought that there was a reason to do so. The disincentive under the current fee-for-service system is that the doctor doesn’t get paid unless you are seen in person. In addition, the ACA law envisions paying more for higher quality (or less for lower quality). So why were these “meaningful alternatives” not included in ACA? Again, political, and the question is “what will change the politics in the future?”

In another NEJM “Perspective”, “Achieving accountable care – “it’s not about the bike” (published online on December 28, 2011), Walker and McKethan argue that it is the skills and competencies of providers, rather than the structure of the systems, that will determine the success of ACOs. Their metaphor is from Lance Armstrong’s memoir, in which Armstrong acknowledges the importance of having a great bike but says that “Although advanced equipment is very important, winning depends more on athletes' riding skills, physical conditioning, and race-day effort.” Cute, but obvious; any athlete with enough money (and all top cyclists have backers with enough money) can buy the best bike, but it is his or her skill and dedication that leads to victory – or not. Is it, however, a good metaphor for medical care? “If an ACO were a bicycle,” Walker and McKethan write, “its wheels, spokes, and gears would be the criteria used by payers such as Medicare to determine providers' eligibility, the methods used to assign patients to a given ACO, and the manner in which financial bonuses are calculated.” They then go on to discuss at some length what ACOs will need to do to “…compel and equip the athletes riding them…” (meaning providers) to do what is necessary, for “…accountable care will depend on a care team's identification of and action on the specific needs and preferences of the individual patient, deploying the most relevant, tailored interventions and supportive services to address patients' specific needs, circumstances, and preferences.”

Sound good? It is an appropriate metaphor in that structure alone will not guarantee success, but it loses strength after that. ACOs are not bicycles, and providers are not athletes. Most important, “success” in the arena of healthcare should not be about “winning”, about “beating” the other “competitors”, but about development structures, methods, practices, and reimbursement procedures in which everyone receives the best, most appropriate care. In which we all win.

And that is going to be one of the big challenges, because neither of these commentaries addresses the fact that not everyone in our country is going to be part of an ACO, and not everyone in our country has health coverage. Those people who do have coverage have found their premiums, co-pays, and deductibles increasing and their benefits diminishing.  ACOs are (at least initially) a program for Medicare recipients, but all we hear from Congress and pundits is that “Medicare costs too much” and that these costs need to be scaled back, so unquestionably the emphasis of programs like ACOs will be on reducing cost.

I have often noted that much of the excess cost in this country is from providing unnecessary, or even harmful, care, and so there is not necessarily a conflict between saving money and increasing quality. But people are different, with different diseases and needs and wants, so there will need to be flexibility. And those who are most disenfranchised will remain outside the pale.

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[1]Fisher ES, McClellan MB, Safran DG, “Building a path to accountable care”, N Engl J Med 29Dec2011;365:2445-2447

Family Medicine in the era of health reform

At the recent Primary Care Access Conference in San Francisco, I was given the opportunity to present the 21^st G. Gayle Stephens lecture. It was a real honor, because it is named for one of the giants of family medicine, and one of the great thinkers on health and medicine of the last half century, in any field. Dr. Stephens was the first director of one of the nation’s first family medicine residencies, at Wesley Hospital in Wichita, KS, and later Chair of the Family Medicine department at the University of Alabama. He was an early and long-time member of the American Board of Family Practice (later Family Medicine) and the author of several of the most seminal articles and books in the field, including “The Intellectual Basis of Family Practice” and “Family Medicine as Counterculture”.  Both of these pieces, along with many others, are discussed in the outstanding “festschrift^;[1; put together by another giant of the discipline, John Geyman, in the January 2011 issue of Family Medicine.

Dr. Geyman says of Dr. Stephens that “He has been, and remains, by far the most original, thoughtful, and elo­quent voice in our field and among the few who best represents the mor­al conscience of the entire medical profession.” I have been privileged to have met, corresponded with, and even to a limited extent collaborated with both Dr. Stephens and Dr. Geyman. I can only hope that my talk was worthy of being associated with Dr. Stephens’ name. In this piece, I  would like to discuss a few of the points I made in that talk related to health care reform, or the Affordable Care Act (ACA); in a later blog I will discuss this in terms of the impact on primary care and family medicine.

Unquestionably the health care reform act, or ACA, is the biggest change in health coverage since Medicare and Medicaid in 1965. It remains deeply flawed, but is nonetheless the touchstone of the opposition to the current administration, as President Obama’s opponents apparently see in it everything that we don’t! The fact is that, rather than bringing us a health system in which everyone is covered, like Canada, or the UK, or Germany, or Switzerland, or Taiwan, it is in large part a big bailout of health insurance companies. And the price that for this – the requirement that everyone have to buy health insurance, the “individual mandate”, is what we hear being attacked, not the insurance companies that demanded it as the price for supporting ACA.

There are some of the parts of ACA that are rather non-controversial (except to the extent that they might not be funded as part of the “don’t fund anything” movement), and are good for family medicine, in the sense that they are good for the health of the American people. These include the increased funding for Federally-Qualified Health Centers (FQHCs), the creation of a panel to review the evidence of effectiveness, if it is left in, and the Primary Care/Health Extension services (which thus far have received no appropriation), among others.

One important component of ACA is the creation of “Accountable Care Organizations”, or ACOs, initially for Medicare patients. They are an effort to promote health by having health providers financially responsible for the health of their patients, that is, to have ambulatory care facilities and doctors, hospitals, nursing homes, and community care facilities coordinate their efforts to prevent illness, treat effectively, and have people cared for in the most appropriate setting, rather than perverse “gaming of the system”, where a failure of ambulatory health care can be a “win” for a hospital when a patient is admitted (as long as they don’t stay too long, or get re-admitted too soon). This kind of structure works well in HMOs, such as Kaiser, or other integrated health systems, but there are likely to be flaws in its implementation; for example, Center for Medicare and Medicaid Services (CMS) administrator Dr. Donald Berwick recently published guidelines for Medicare ACOs in the New England Journal of Medicine, “Launching Accountable Care Organizations — The Proposed Rule for the Medicare Shared Savings Program”.  He says that the ACOs will be “Held to rigorous quality standards (see table). Proposed Measures for ACO Quality-Performance Standards.), ACOs will be expected to be proactive in their orientation and to regularly reach out to patients to help them meet their needs for preventive and chronic health care.”

However, Berwick immediately adds that “Patients who seek care at their ACO will know that their physicians are part of that ACO, but as beneficiaries of fee-for-service Medicare, they will continue to be free to seek care from any Medicare provider they wish. They will not be locked into seeing only particular health care providers.” This sounds relatively benign, and certainly politically wise, but could completely undercut the effectiveness of the program. The reason that Kaiser and other HMOs are effective in managing care that delivers high quality at low cost is because their patients are restricted to where they can seek services; if a Medicare patient who is part of an ACO does not like that they have been “denied” any form of care by their doctor or hospital, no matter how appropriately, can now go “outside the system” to another doctor, hospital, emergency room or pharmacy-based urgent care clinic, all efforts at cost control are at risk. This is, of course, the conundrum: control of costs requires some degree of restriction of unlimited options. It is quite parallel, in fact, to the “individual mandate” that the insurance companies demand, and in this sense they are correct. It will not work to require insurance companies to insure everyone if everyone is not required to have insurance, because then only those who need care will demand coverage, risk goes way up, and so would premiums.

Some politicians and pundits have compared ACOs to the managed care era of the 1990s, and supporters worry it will receive the same backlash from the public that occurred then. I believe that in that period it was not managed care that was at fault but two major characteristics that happened in conjunction with it. The most important was that the entire operation was taken over by for-profit companies, largely insurance companies, that saw benefit to their bottom line by restricting care. The efficiencies of consumer cooperative HMOs had benefited their members; these new entities denied care to benefit their stockholders. It was the corporate for-profit control, not the management of care, that led to consumer dissatisfaction with restrictions on access to care.

The second big problem is related to one that I have discussed before (Red, Blue, and Purple: The Math of Health Care Spending, October 20, 2009), the fact that most people are not sick. In an effort to control costs, everyone was made to jump through hoops, such as gatekeepers and prior authorization, which made them angry but did not do much for the cost, since most people do not use much medical care. Indeed, for at least half the population, you could let them do whatever they want, and they wouldn’t use any significant number of health care dollars. To illustrate this, I am reproducing the graphs from the previous blog.

While there are some things we can do to reduce the risk of unexpected crises –cancer, multiple trauma from car accidents, infants in NICUs – and control the costs of caring for those who have them, the most obvious benefit will be achieved by pre-emptively working with people whose chronic diseases have gotten so bad that they are frequently admitted, often to Intensive Care Units. These are the people who should be targeted for intensive intervention, not only medical but in terms of the social determinants of health, such as in the programs highlighted by Atul Gawande in his February 2011 New Yorker piece, “The Hot Spotters”. Needless to say, such interventions are being funded on a shoestring, while the high-tech interventions get all the money.

 It doesn’t have to be this way. We could have a rational, cost-effective health care system if we start with coverage for all through a single-payer mechanism. We might be able to back into quality despite not having one, but it will be much harder.

                                                               

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<!--[if !supportFootnotes]-->[1]<!--[endif]--> Festschrift: “A volume of learned articles or essays by colleagues and admirers, serving as a tribute or memorial especially to a scholar”

ACA, ACOs, and Meaningful Competition

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Criticisms of the new health law, the Affordable Care Act (ACA), have come from all sides. While many of them are justified, they also miss many of the law’s positives. It doesn’t assure the reliable, cost-controlled security of a real universal health insurance program, but it will lead to coverage of tens of millions of more Americans, and will eliminate the ability of insurance companies to engage in health risk underwriting, the practice that allows them to deny coverage to those with pre-existing conditions. These are points that the President made in his recent interview on Jon Stewart’s Daily Show. "Individual mandates", i.e., forcing everyone to buy insurance, while it is a touchstone for the right and is the issue found unconstitutional by a Virginia federal judge (and which will probably go to the Supreme Court), was the price that insurance companies demanded for assuring coverage for everyone. As I have often written, you have to have all the healthy people in if you are going to cover the sick; there are many more healthy, but all of us can become sick.

Apparently, a lot of people understand this. A recent poll by Marist College and McClatchy newspapers shows a majority (51%, but still a majority) of Americans want to continue (16%) or increase (35%) the benefits of ACA, with 44% going the other direction. “Among groups with pluralities who want to expand it: women, minorities, people younger than 45, Democrats, liberals, Northeasterners and those making less than $50,000 a year. Lining up against the law, 11 percent want to amend it to rein it in; 33 percent want to repeal it. Among groups with pluralities favoring repeal: men, whites, those older than 45, those making more than $50,000 annually, conservatives, Republicans and tea party supporters.” OK, these are the “usual suspects”, except that it amazing and saddening to me that older people who are receiving Medicare can be opposed to expanding benefits to others. Maybe they are just ignorant of Medicare and the current law (as reflected in “Keep the government’s hands off my Medicare!”); this is also sad, but would explain what would otherwise be an enormously, almost immoral, selfishness. Yes, more educated Medicare recipients are concerned that the benefits for that program will be scaled back (and there are unquestionably threats to do so!) but this does not justify opposition to extending those benefits to the rest of the country.

A new set of problems is described by Robert Pear in the New York Times, on Sunday, November 21, 2010, “As health law spurs mergers, risks are seen”. The focus of his article is the planned “accountable care organization” (ACO), a relationship between one or more hospitals (or “health systems”), doctors, nursing homes, and home health care agencies. The idea behind creating ACOs is that, by coordination of care and sharing of information, people’s health can be improved and money can be saved. There is a lot of sense to this approach. If a patient is discharged from a hospital to home, or to a nursing home, and there is more sharing of information with the home health agency, or nursing home, or the primary care doctor who will be responsible for care when they leave the hospital, there is greater likelihood that there will not be lapses in the patient’s care. Similarly, if the person’s health deteriorates to the point of needing to be re-admitted, it would be best if 1) all that could have been done in the non-hospital setting to possibly prevent that from happening was done, and 2) all the information about what was done was transmitted to the hospital.

The organizations most cited by health reformers as having been successful in controlling costs and improving quality are those that are already “integrated”, where the system that owns the hospital(s) also employs the physicians and controls the nursing homes and home health care agencies, or else has very close and dependent financial relationships with them, such as Intermountain Health Care, Geisinger Health System, and Kaiser-Permanente. Information – and money, including money saved by having fewer expensive readmissions, is shared among the various participants. So ACA creates financial incentives for others to create such relationships, the ACOs. The issue raised in Pear’s article are that many forms that these ACOs might take run the risk of violating existing laws that are in place to prevent kickbacks, monopolistic practice, and other forms of corruption. For example, it is illegal for a health system for offering contingency payments a physician who is not an employee – such as for admitting patients to the hospital, keeping stays shorter, etc. This makes sense too.

So we have two conflicting things that “make sense”: greater collaboration and aligned incentives can create greater efficiency and save money, but they can also lead to oligopoly and corrupt relationships. Monopoly is more efficient, but creates the opportunity for exploitation. Modern business practices, based on the work of people such as W. Edwards Deming[1], emphasize the importance of long-term relationships with suppliers so that they can learn and better meet your needs over time, something there would be no incentive to do if doing so cost them money, and you were likely to pull your business the next year because someone else bid lower. Governments usually have policies requiring contracts given to the lowest bidder, but there is a danger that the work will be of lower quality.

Much of the criticism of ACA from the “right” has been about lack of “choice”, but as we look at implementation of the health care law, we need to be careful that ideology does not trump actual health outcomes. Two recent studies show the risks of the “law of unintended consequences” of policies that encourage consumer choice and a market approach to health coverage. In “Health care use and decision making among lower income families in high-deductible health plans”[2], Kullgren and colleagues demonstrate that, in fact, as might be anticipated, poor people who choose to spend less out-of-pocket money by enrolling in such high-deductible plans pay the price later in not accessing health care and having poorer outcomes. Millet, et al, in “Unhealthy competition: consequences of health plan choice in California Medicaid”[3], show that, perhaps less intuitively, Medicaid (Medi-Cal) patients in California counties where they have a choice of plans are less likely to be enrolled all year than where they do not have such choice, and “Potential benefits of health plan choice may be undermined by transaction costs of delayed enrollment, which may increase the probability of hospitalization for ambulatory care-sensitive conditions.”

Ideally, a single-payer, Medicare-for-all, system eliminates the risks that people will not enroll or have gaps in enrollment, that there will be people left out, that people will, for understandable and reasonable short-term financial reasons, make choices that can have long-term adverse effects on their health, and that there will be different standards for quality of care for people with different insurance. But even that does not address the system of provision of care. The ACA law seeks to encourage communication and efficiency, but critics see danger in merger and oligopoly, which could limit options for consumers and in itself create risks to health care access and quality.

What could the solution be? One might be to have cooperative relationships with open-source access to information. Thus, your health information would not be in the control of a given hospital, health care system, or doctor, but rather be controlled by you, and made available to whichever provider – hospital, doctor, nursing home, etc. -- that you chose to provide your care. The information would not be in proprietary electronic medical record format, but rather in an interoperable format that could be utilized by any provider. Incentives could exist globally, not simply within a single organization, to produce the highest quality care rather than the highest profit margin. This would be an excellent example of real competition.

[1] See Mary Walton, The Deming Management Method, Berkeley Publishing Group, New York (originally published Dodd Mead, NY, 1986).
[2] Kullgren JT et al., “Health care use and decision making among lower income families in high-deductible health plans”, Archives of Internal Medicine, 2010;170(21):1918-25. (Hyperlink is to abstract as full text not available free on line.)
[3] Millet C, Chattopadhyay A, Bindman AB, “Unhealthy competition: consequences of health plan choice in California Medicaid”, American Journal of Public Health Nov2010;100(11):2235-40. (Hyperlink is to abstract as full text not available free on line.)
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