Accountable care organizations are receiving a considerable amount of hype, but many experts are wary about the program’s implications. “On the surface of it, an ACO sounds like a wonderful thing. Who would be against motherhood, apple pie or ACOs?” says Peggy Naas, MD, MBA, vice president of Physician Strategies for VHA Inc. Here, Dr. Naas expands upon five problems to resolve with ACOs.
1. Healthcare organizations with few collaborative relationships or contracts will struggle. When it comes to a hospital’s successful implementation of an ACO, “a lot of depends on who the population is, what the marketplace is and how connected the hospital is with collaborative relationships,” says Dr. Naas. The healthcare organizations that may struggle most are those with disaggregated medical staff and a disaggregated marketplace. This might be a single hospital with a small medical staff that doesn’t have collaborative relationships with other community caregivers or is in a market with many competing, disaggregated organizations. While a healthcare provider may offer exceptional patient care, a major determining factor of success is now the relationships it holds with healthcare organizations outside the hospital walls, such as outpatient clinics, palliative care and home care services.
2. Unclear patient attribution means difficulties for accountability. Rather than enrollment, patients will be attributed to ACOs on the basis of their primary care physician and patterns of service use. There is concern over how patients will understand — or even know of — these assignments. “Do the patients know that they belong to us or that we’re assuming responsibility for their care? Do they pick us? Do they want us to assume responsibility? This is critical because the rules around attribution, and transparency of that attribution, to providers or patients is still unknown,” says Dr. Naas. This is problematic for physicians and hospitals, since they are expected to be held accountable for the unknown. “If I’m a physician, or a hospital, and the government is asking me to be accountable for all the care this patient gets…but I can’t limit where she goes. She may not even know she’s attributed to me. How do you expect groups to take accountability for patients who can go anywhere?”
3. Hospital culture and capital will be still wound up in acute care as preventive care takes over. This next issue is really a “wonderful problem to have,” according to Dr. Naas. As populations receive more preventive care and maintenance, there may be reduced need for inpatient acute care. Hospitals with a tremendous amount of capital invested in acute care may face major financial and cultural shifts. “We pay people to perform high intensity care and high procedural care,” says Dr. Naas. “But let’s say we actually get preventive care processes upstream and you with cardiac disease never get short of breath, never go into heart failure. What do you do then? There are all these ICU beds waiting for you, but you don’t need them. How do you transfer those beds to another use? How do you find other work for skilled care providers?” Timing is also a challenge — a hospital doesn’t want to start easing back on critical care too soon, or it faces the entirely new dilemma of shortages. “You can’t unwind everything too fast,” says Dr. Naas. “Timing and balance are also an issue.” While a healthier patient population is certainly a wonderful problem, it raises fundamental questions over what hospitals may, or should, look like down the road.
4. Plans and policies simply sound better in theory before unwinding in demonstration. There’s an interesting irony to the ACO nickname of “HMOs on steroids,” according to Dr. Naas. “Given all the concern about steroids, isn’t that a bad thing? You can see that unusual inference. It doesn’t sound good.” HMOs and ACOs have more than that last letter in common — critics have been quick to call ACOs “HMOs in disguise” or “HMO redux.”
“We don’t hear a whole lot about HMOs anymore,” says Dr. Naas. “They’re not gone, but we certainly don’t talk about them in the same way. We don’t hear those three letters that much anymore. There are reasons for that: the idea of HMOs on paper sounded good and appealing, but as they played out in the marketplace and people saw their imperfections and worried about limited networks and limited choices, they became less appealing to patients and employers who create benefit plans,” says Dr. Naas.
Healthcare fads usually tout the promise of being the “total package,” according to Dr. Naas, a popular tagline for ACOs. It’s supposed to be a coordinated continuum of care, but in the past, there were legislation, antitrust and anti-competition concerns, which left some vertically or horizontally integrated healthcare organizations completely unwound. It is unclear how the marketplace and government will manage these concerns this time.
5. CMS isn’t reducing this uncertainty. The delay in specific guidelines for ACOs is a problem in and of itself. Unless CMS provides organizations the rules, regulations and comprehensive data needed for planning an ACO, the concept may never be effectively implemented to its potential, according to an article from The New England Journal of Medicine. Providers considering ACOs want to know how much care their patients receive elsewhere and whether such services are concentrated in a small number of providers who might be invited to join the ACO. Low-cost areas need to restructure incentives and areas with high Medicare costs often have the least infrastructure in place. The planning and creation of ACOs will be extremely challenging, and the lack of information is not helping. Uncertainty could be alleviated if providers had data and guidelines to begin planning and implementing step-by-step, rather than the ACOs looming as a vague concept with superficial appeal.
1. Healthcare organizations with few collaborative relationships or contracts will struggle. When it comes to a hospital’s successful implementation of an ACO, “a lot of depends on who the population is, what the marketplace is and how connected the hospital is with collaborative relationships,” says Dr. Naas. The healthcare organizations that may struggle most are those with disaggregated medical staff and a disaggregated marketplace. This might be a single hospital with a small medical staff that doesn’t have collaborative relationships with other community caregivers or is in a market with many competing, disaggregated organizations. While a healthcare provider may offer exceptional patient care, a major determining factor of success is now the relationships it holds with healthcare organizations outside the hospital walls, such as outpatient clinics, palliative care and home care services.
2. Unclear patient attribution means difficulties for accountability. Rather than enrollment, patients will be attributed to ACOs on the basis of their primary care physician and patterns of service use. There is concern over how patients will understand — or even know of — these assignments. “Do the patients know that they belong to us or that we’re assuming responsibility for their care? Do they pick us? Do they want us to assume responsibility? This is critical because the rules around attribution, and transparency of that attribution, to providers or patients is still unknown,” says Dr. Naas. This is problematic for physicians and hospitals, since they are expected to be held accountable for the unknown. “If I’m a physician, or a hospital, and the government is asking me to be accountable for all the care this patient gets…but I can’t limit where she goes. She may not even know she’s attributed to me. How do you expect groups to take accountability for patients who can go anywhere?”
3. Hospital culture and capital will be still wound up in acute care as preventive care takes over. This next issue is really a “wonderful problem to have,” according to Dr. Naas. As populations receive more preventive care and maintenance, there may be reduced need for inpatient acute care. Hospitals with a tremendous amount of capital invested in acute care may face major financial and cultural shifts. “We pay people to perform high intensity care and high procedural care,” says Dr. Naas. “But let’s say we actually get preventive care processes upstream and you with cardiac disease never get short of breath, never go into heart failure. What do you do then? There are all these ICU beds waiting for you, but you don’t need them. How do you transfer those beds to another use? How do you find other work for skilled care providers?” Timing is also a challenge — a hospital doesn’t want to start easing back on critical care too soon, or it faces the entirely new dilemma of shortages. “You can’t unwind everything too fast,” says Dr. Naas. “Timing and balance are also an issue.” While a healthier patient population is certainly a wonderful problem, it raises fundamental questions over what hospitals may, or should, look like down the road.
4. Plans and policies simply sound better in theory before unwinding in demonstration. There’s an interesting irony to the ACO nickname of “HMOs on steroids,” according to Dr. Naas. “Given all the concern about steroids, isn’t that a bad thing? You can see that unusual inference. It doesn’t sound good.” HMOs and ACOs have more than that last letter in common — critics have been quick to call ACOs “HMOs in disguise” or “HMO redux.”
“We don’t hear a whole lot about HMOs anymore,” says Dr. Naas. “They’re not gone, but we certainly don’t talk about them in the same way. We don’t hear those three letters that much anymore. There are reasons for that: the idea of HMOs on paper sounded good and appealing, but as they played out in the marketplace and people saw their imperfections and worried about limited networks and limited choices, they became less appealing to patients and employers who create benefit plans,” says Dr. Naas.
Healthcare fads usually tout the promise of being the “total package,” according to Dr. Naas, a popular tagline for ACOs. It’s supposed to be a coordinated continuum of care, but in the past, there were legislation, antitrust and anti-competition concerns, which left some vertically or horizontally integrated healthcare organizations completely unwound. It is unclear how the marketplace and government will manage these concerns this time.
5. CMS isn’t reducing this uncertainty. The delay in specific guidelines for ACOs is a problem in and of itself. Unless CMS provides organizations the rules, regulations and comprehensive data needed for planning an ACO, the concept may never be effectively implemented to its potential, according to an article from The New England Journal of Medicine. Providers considering ACOs want to know how much care their patients receive elsewhere and whether such services are concentrated in a small number of providers who might be invited to join the ACO. Low-cost areas need to restructure incentives and areas with high Medicare costs often have the least infrastructure in place. The planning and creation of ACOs will be extremely challenging, and the lack of information is not helping. Uncertainty could be alleviated if providers had data and guidelines to begin planning and implementing step-by-step, rather than the ACOs looming as a vague concept with superficial appeal.