Measuring What Matters for ACOs

More than 55 percent of the U.S. population now lives in a local area with an accountable care organization (ACO), in which a group of providers is held accountable by a payer for the total cost and quality of care for a defined set of patients. The spread of ACOs, however, by no means ensures their success.

Significant questions remain about whether the goals of the model—better care at lower costs—will be achieved.

There are some signs that the ACO model—by rewarding provider organizations for implementing high quality mechanisms for care delivery that lower overall costs—is driving innovation in the marketplace. For example, the Montefiore ACO in New York City is using special scales in the homes of patients with congestive heart failure to monitor for changes in weight that could indicate trouble.

Walgreens has formed three ACOs and is using its retail pharmacies as low-cost care centers. In addition, the Beth Israel Deaconess Care Organization created a high-touch care management system in which nurse practitioners visit the ACO’s sickest patients at home to reduce the number of hospital readmissions.

Yet, there are also challenges inherent in the adoption and implementation of the ACO model. There have been several wide-ranging proposals on how to enhance accountable care, especially in Medicare, but we believe that developing policies to standardize measurement is an important first step.

First, we need to promote adoption of a core set of effective measures across payers. Current measures, such as screening for high blood pressure, are limited in scope and fail to incorporate important dimensions, including health outcomes meaningful to patients and the total cost of care for those within the ACO. Proposals for more advanced measures have been developed but not yet adopted, in part because of provider concerns about being held accountable for aspects of performance they do not fully control.

These issues could be addressed by operationalizing the concept of “shared accountability” through patient engagement and partnerships, as with local, multistakeholder community health coalitions, and embracing a core set of more challenging and meaningful metrics, such as functional health and total costs per capita.

Once we have effective measures, we need to ensure all payers are using the same metrics. Today, payers each use different performance metrics in their ACO contracts, which can make it difficult for ACOs to engage in effective self-monitoring and hold their own providers accountable as they try to juggle multiple cost and quality goals.

Attempts by ACOs to promote alignment across payers during the contract negotiation process—in many cases using the Medicare Shared Savings Program quality metrics as the baseline—are often unsuccessful because of lack of incentives and an effective standard. Additional funding is needed to test value-based measures for ACO contracts, and the federal government can eventually take the lead in disseminating these measures through its ACO programs.

Second, we should mandate—or at least encourage—the collection and aggregation of under-65 claims data. Medicare data are readily available for tracking the impact of ACO formation and performance, but we have almost no insight into what is happening for the commercially insured and Medicaid populations. Less than a dozen states currently have all-payer claims databases, and very few of these states report information publicly on the total cost of care.

Consolidation through the formation of ACOs is likely to have varying effects on care, prices, and spending across markets. Without transparent information on outcomes and costs, consumers and purchasers have no way to assess value, and it will be impossible to evaluate ACO implementation regionally or nationally. We are effectively flying blind.

To improve transparency, Congress can establish incentives to encourage plans to provide their claims data to independent organizations capable of tracking, analyzing, and reporting performance at regional and aggregated provider levels (i.e., for ACOs and hospitals, not individual physicians).

Congress can also prohibit the clauses in contracts among suppliers, providers, and health plans that forbid sharing information on actual prices paid for services and that impede public reporting of meaningful information on the total cost of care.

In short, the importance of practical and accurate measurement of ACO performance cannot be overstated. We can’t afford just to look where light from the lamppost is now shining: we need better measures, and we need to know what is happening beyond Medicare.

Elliot Fisher, MD, MPH is a professor at Darmouth’s Geisel School of Medicine and The Dartmouth Institute for Health Policy and Clinical Practice., as well as a principal investigator for The Dartmouth Atlas Project.

William L. Schpero, M.P.H., is currently a Health Policy Fellow at The Dartmouth Institute for Health Policy & Clinical Practice (TDI).

Janet M. Corrigan, PhD, MBA is a Distinguished Fellow at The Dartmouth Institute for Health Policy & Clinical Practice and a Senior Policy Scholar with ReThink Health where she focuses on sustainable health investment strategies.

This post originally appeared at The Commonwealth Fund Blog.

9 replies »

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  2. We are attacked on all frtons: we live too long, medical technology is too innovative and therefore too expensive, there are too many people without insurance and without jobs (maybe there are just too many people), there are not enough doctors and perhaps not enough med schools, med schools are too expensive, people don’t have end of life plans, too many people find attorneys who will file silly lawsuits, but doctors and hospitals do make terrible mistakes, etc., etc., etc.*****************************I’m not sure what health care system will work so that it’s just between you and Granny when Granny is a stand-in for 310 million Americans. But I suggest that the way that was done in whatever golden period you chose will not work in today’s world unless you are willing to discard tons of Americans and tons of technology. No more keeping heart patients alive until 90, premies less than a pound, and organ transplants.So let’s remember the good old days… Are you content to allow insurance companies to deny insurance for pre-existing conditions? How about their practice of rescission? Does fee for service work? Is ER care the way to go? Should the government subsidize any part of health care or do you agree with Mr. Garland that that just mucks up the market? I think he all for free markets. Swell. Let’s get rid of NIH and no tax breaks for R&D or “non-profit” hospitals. (Boy, wouldn’t I love to see Medtronics tax returns!) Administrative overhead? For sure. Allow me to remind you of HCA. I’ve seen the waterfall walls. SOMEBODY is making a lot of money.

  3. In theory, I agree that ACOs should be judged based on measurable criteria.

    However, there is a danger of “teaching to the test”. Once the criteria are published, the system can be “gamed” by paying attention to those criteria at the expense of other important things.

    And of course, like in the schools there is the danger of various forms of cheating to make the “grades” look better on the “standardized tests”

    Finally, there is the problem of properly comparing practices some of which contain a large number of poor, uneducated patients with poor complaince with practices that have different demographics.

  4. “First, we need to promote adoption of a core set of effective measures across payers.”

    Wrong denominator. Each ACO does not have the same patient population or utiliation rates. The same measure in one does not measure the same thing in the other.

    ACO’s are another exercise in the square peg in the round hole effort. One size does not fit all.

    Gather all the data you want. It does not travel to the bedside in any valid way. ACO will reward the provider for following the rules and to hell with the patient. Plausable deniability. Pass the spoils, please.

  5. A foray into the normative ethics of the ACO:

    1. The patient has to be part of the team and brought into the savings effort in some way. Eg reduced copay etc.
    2. The patient or an agent of the patient should be at the case management meetings.
    3. All stakeholders who are remunerated by the act of care for the patient must be part of the savings effort as well as share in the savings reward.

  6. Elliott: Your take on ACOs is right on, but unless the bonuses/savings are substantive enough to keep physicians engaged, they’ll disengage just as they did in PHOs.

  7. We do need good measures, and transparency. I can’t think of a good argument for allowing the hiding of important market information, at a time when across healthcare we are engaged in a serious effort to do things under wildly new business models. Few organizations in healthcare have real, valid experience with anything resembling an ACO, and almost none have any experience with the second version, or the third, after they have learned from experience and made mid-course corrections. ACOs seem like a good idea, but it’s prototypes all the way down. Without good, shareable information, we are all operating in the dark, with less than half a clue what will make it work better.