The Devil Is In The Details: Grappling With ACO’s

Posted on | February 25, 2013 | Comments Off on The Devil Is In The Details: Grappling With ACO’s

Mike Magee

In a recent piece, “American Exceptionalism and The Affordable Care Act”, I layed out an optimistic view of the legislation’s potential. I did also state however that “Of course, this is a work in progress. We face many challenges and unintended consequences ahead that, once revealed, will need to be addressed. At the same time, we need to confront short and long term financing of these programs, quality and reliability, and define better the responsibilities of the people and the people caring for the people.”(1)

In response to that piece, and other forums such as the February 13, 2013 National Committee for Quality Assurance webinar, leaders are sharing what they see as the “devil in the details”. Here’s a sampling:

IMPACT ON THE ECONOMY
“While you paint a good picture of the benefits of ACA you leave out the methods, means, strategies and structures to achieve all this and hold down costs. Current federal budget projections show healthcare spending exceeding 20% of GDP within ten years. Once the 20% threshold is exceeded healthcare expenditures cannot be controlled without tanking the economy. Under these circumstances, a 5% reduction in healthcare expenditures will reduce the overall economy by 1%. In order to have a real assessment of healthcare cost one must evaluate the cost of production, purchase price, and long term economic cost. Edward Gamache, President/CEO, Harbor Beach Community Hospital, Harbor Beach, Michigan.(2)

A FEE FOR SERVICE ENVIRONMENT
“We are certainly not new to this, and despite the fact we have been involved with this on the Medicare side for a number of years, it really hasn’t had an impact on our marketplace. We are entirely fee for service. The managed care tidal wave never hit Montana at the end of the last century, so it never had an impact on the commercial market. It’s a very difficult environment to create an ACO discussion.” Douglas Carr, MD, medical director of education and system initiatives, Billings Clinic, Montana.(3)

ONE FOOT IN TWO CANOES
“So every time we standardize around best practices, improve efficiencies and eliminate waste, that potentially results in decreased compensation to providers and others in the health care system, and that concept of functioning with one foot in two canoes is certainly a challenging one. We believe the time to adopt value-based care transformation is now — most importantly, because it is the right thing to do, but additionally, because it is the smart thing to do financially,” Hal Teitelbaum, MD. Managing Partner and CEO, Crystal Run Healthcare, Middletown, N.Y(3)

LACK OF INTEREST AND SOPHISTICATION
“The reasons that we have not made this shift are related to private-payer factors — a lack of interest from some, who are advantaged from our current work in a fee-for-service contract, and a lack of sophistication from others, who do not have the data analytic capabilities to engage in this type of contract,” Jonathan Nasser, MD, co-chief clinical transformation officer, Crystal Run’ Healthcare, Middletown, NY.(2)

INTERNAL ALIGNMENT
“We do see the need to have our internal compensation system fully aligned with external reimbursement. Aligning the internal compensation programs with the ACO program will be a key initiative this year that will include extensive involvement from our physicians.”John Smylie, COO, Essentia Health System, Duluth, Minnisota.(3)

DOWNSIDE IF WE FAIL
Every policy since 1965 has promised improved access and quality with lower cost. This does not appear to be any different, except this time failure will lead to collapse of the system. Edward Gamache, President/CEO, Harbor Beach Community Hospital, Harbor Beach, Michigan.(3)

Bottom Line: None of this is easy. But the fact that we are now getting down to the details suggests that we have moved beyond the status quo.

For Health Commentary, I’m Mike Magee

References:

1. Magee M. The Affordable Care Act and American Exceptionalism. https://www.healthcommentary.org/?p=5486

2. Gamache E. Comment on Health Commentary to “The Affordable Care Act and American Exceptionalism”. February 23, 2013.

3. Maat ST. Physicians Skittish On ACO’s Over Pay. February 25, 2013. American Medical News.http://www.ama-assn.org/amednews/2013/02/25/bisc0225.htm