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Ready, Set…ACO?

Happy New Year, everyone!  2010 was certainly action-packed, and 2011 promises the same.

I hear a lot of thunder about getting ready for ACOs.

This isn’t a crystal ball forecast, but I see hospitals spending tons of capex on new HIT from old-fashioned “software-based” companies, and it seems like the EMR is the new “pavilion.”  I see hospitals buying medical practices using arrangements that are certain to require the hospital to subsidize doctor income.  [For another take: Paul Levy on ACO.]

These two major waves are explained by clients and prospects alike as “readiness for ACO.”

I have three thoughts:

  1. Don’t worry.  We at athenahealth will do our part.  If and when ACO payment models emerge, you won’t need to buy a new “module” from us in order to get payment.  We will go get you that money the same way we are getting you the “Meaningful Use” stimulus payments, the P4P money, and the plain old health care reimbursements that we have always delivered.  The changes to our technology and service needed to accomplish all that will be on us.
  2. Don’t turn blue holding your breath waiting for the big bonus opportunity.  The fundamental underlying principle of an ACO is that you will get a bonus in exchange for lower utilization.  If that bonus is bigger than what you’d get from the utilization, then why would Medicare pay it?  If that bonus is LESS than what you are getting now, why would you do it?
  3. I have met newly elected Republican lawmakers of late and few of them are thinking that money will be saved with this approach.  As with other aspects of health reform law, they appear to be eager to… well, let’s just say…scrutinize the mechanics closely.

None of this is certain and there will be exceptions to all the rules anyone tries to write.

This leaves one thing certain.

Do NOT make multi-year investments that depend upon ACO actually happening.

So as far as ACO goes, pay as you go.

With me?

Jonathan Bush co-founded athenahealth, a leading provider of internet-based business services to physicians since 1997.  He blogs regularly at THCB and at the athena blog where this post first appeared. Prior to joining athenahealth, he served as an EMT for the City of New Orleans, was trained as a medic in the U.S. Army, and worked as a management consultant with Booz Allen & Hamilton. He obtained a Bachelor of Arts in the College of Social Studies from Wesleyan University and an M.B.A. from Harvard Business School. He blogs regulary at the athena blog, where this post first appeared.

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spikepcpmedinnovationJanice Reverson, RNMargalit Gur-Arie Recent comment authors
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spike
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spike

But the other assumption is that doctors will be provided incentive to work together on a given patient, which is not the case today. A patient may spend less time with any given doctor, but doctors may spend more time speaking with each other about the patient. Obviously the goal is to be more efficient in the delivery of care, so it would be expected that doctors may spend less physical time with each patient. But it also might mean having fewer visits with specialists at all, or more time spent emailing rather than having to come in to the… Read more »

pcp
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pcp

Spike: ” I thought a big piece of ACOs was to create a system where your doctors would actually, you know, talk to each other and maybe even talk to you.” Actually, most new models of health care, such as ACOs and medical homes, are, if you read the fine print, based on the assumption that the doc will have a larger patient panel and spend less time with each patient. Nate: “Improving patient care isn’t going to be doing what is best by the patient regardless of the cost, but I do see employers pushing ACOs to get better… Read more »

spike
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spike

First, I never thought I’d ever say this, but I agree with Nate. Total utilization will always increase, but so will the number of people. Let’s reduce utilization and cost per person by getting rid of procedures that don’t add value. What blows me away is that doctors have created the most un-user-friendly system in the world and still think they should be insulated from suggestions on how to do it better. I thought a big piece of ACOs was to create a system where your doctors would actually, you know, talk to each other and maybe even talk to… Read more »

nate
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nate

if I have 2-3 ACOs in my market and I am an employer coalition with 10,000 lives why would i settle for anything short of accountability?
Employers, as long as they are allowed to manage healthcare, have a lot of power, now that healthcare is expensive they are exercising it.
Improving patient care isn’t going to be doing what is best by the patient regardless of the cost, but I do see employers pushing ACOs to get better so it reduces cost.

pcp
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pcp

“Then they should be dictating the game and forming Medical Homes and ACOs”
Nate, that would be the logical response, but I think any group of docs large enough to organize and capitalize competition for their local mega-hospital will be so tied up in anti-trust litigation from the word go that they’ll be paralyzed.
Ms. Gur-Aire’s analysis seems quite accurate. Anyone who thinks ACOs will be primarily about improving patient care is being naive. The “Accountability” will be for preserving the revenue stream for large hospitals.

medinnovation
Guest

I belong to the school of thought that says politicians can do little to alter the fundamental nature of society and a culture: all it can do is free up individual members of society to be more innovative and to do the right thing. I am not sure ACOs accomplishes these things. As always, I may be wrong but making independent physicians dependent of hospitals doesn’t strike me as the right thing to do.

Janice Reverson, RN
Guest
Janice Reverson, RN

The unregulated experiments using HIT continue, trying to prove benefit for meaningfully dangerous medical devices in care delivery systems that endanger and kill patients.
Medical care is rapidly detriorating, directly proportional to the penetration of HIT. Nero is fiddling while Rome burns.

Margalit Gur-Arie
Guest

Nate, any way you twist and turn this, Mark’s initial comment still applies. The price we pay for care will have to go down, ergo somebody will be collecting less. The argument that efficiency will be the outcome from using ACO tools, which seem to strangely proliferate before ACOs are defined, and the assumption that those efficiencies will translate into lower consumer prices is debatable in view of the Kaiser example, which is the closest thing to an ACO I can think of, and yet their premiums are not lower than anybody else. More likely ACOs, if they realize any… Read more »

nate
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nate

“Do you think you can sell policies that severely restrict access to ABC and expensive specialists?” Sure do, its already happening. I have had very little push back from employers willing to give up the all inclusive PPO for one that is affordable. Not saying everyone is on board or ready to make the switch but enough that there is now a market for it. “underpaid PCPs who come out with the short end of the stick.” Then they should be dictating the game and forming Medical Homes and ACOs and not waiting for someone to tell them what their… Read more »

Casey Quinlan
Guest

The intention the creation of ACOs – improved quality – will likely be subsumed to the reality of operating ACOs: controlling reimbursement. Healthcare delivery in the US is a highly skewed marketplace. The ultimate customer – the patient – is tertiary in the command and control of the market. That status – there, but not first in line, or even second, when it comes to making decisions about how the market operates – has turned patients into what amounts to a toddler with mommy’s Visa card: demanding, liable to tantrums, and totally clueless about the real economic impact of their… Read more »

Lumeris ACO Tools
Guest

I’m not sure what the future holds for the Accountable Care Organization that’s articulated in legislation, but I do know our health care system is RAPIDLY moving toward greater acountability. (What I’ll call an Accountable Delivery System.) As Mr. Ohrenstein correctly noted, that traiin has already left the station. In that new era of accountable health care, best guesses and good intentions won’t cut it. You can’t just try harder … you have to get smarter about how you take care of your patients. Sadly, the “typical” medical organization doesn’t currently have the tools or technology necessary to thrive in… Read more »

Nigel Ohrenstein
Guest

In all walks of life, we know that accountability normally drives improved performance. That’s why we all want our employees to have meaningful objectives and we tie performance to those objectives. The same is true for physicians – we should demand (as consumers) that they are accountable. Similarly, as consumers, we get annoyed if we type in our account number on the phone and then the customer service reps asks us for it. “Why did I bother typing it in if they are going to ask me for it”. In short, as consumers we demand certain level of service. Accountable… Read more »

Lloyd L Knight
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Lloyd L Knight

Interesting to read a majority of comments about ACO’s as though their primary function was to change reimbursement. Even if ACO’s had no effect on reimbursement don’t ACO’s represent an opportunity to increase value by improved quality through “more effective, engaged and convenient care to patients”? Regardless of legislation or models for reimbursement, aren’t patients best served by effective “care delivery innovation”? Instead of ACO’s won’t work or their effect on providers and payers, from a patient’s point of view this discussion should be about ACO’s as a part of a change in delivery of care. Then we might see… Read more »

pcp
Guest
pcp

Isn’t reducing the size of the pie not just a premise but the whole point of ACOs?

Jonathan Epstein
Guest

An underlying premise of ACOs is that they will reduce healthcare costs. While this remains to be seen, at the very least and as others have touched on, compensation to providers is being repackaged and redistributed. This will lead, for better or worse, to winners and losers. However, let’s not have the discussion about ACOs entirely focused on redistributing the existing “income pie”. Let’s look at using ACOs to increase the size of “pie” while delivering more effective, engaging, and convenient care to patients. Within an ACO, the utilization of telehealth software creates an opportunity for providers to deliver their… Read more »