Recently, Anish Koka, MD, a Cardiologist from Pennsylvania, posted his anti-Accountable Care Organization (ACO) manifesto here on The Health Care Blog.  Koka argues that ACOs don’t work and are doomed to fail because they were designed by non-practicing physician policymakers and academics in ivory towers. He appears to be basing his judgment on a commercial ACO contract that only pays him $4 per month extra for care coordination and requires that he meet specific quality measures. He is also conflating his experience in a commercial ACO with Medicare ACOs, and interprets the initial results of one Medicare ACO program to mean that all ACOs are a failure. Finally, he relays an anecdote of caring for one of his patients, Mrs. K, a patient with chronic illness who doesn’t want to take her medication.
In his post, Dr. Koka calls out “well-meaning, hard-working folks that own a Harvard Crimson sweater…[whose] intent is to fundamentally change how health care is provided.” As luck would have it, I do own a Harvard Crimson sweater, and I’d like to respond.
The Affordable Care Act (ACA) of 2010 gave the Centers for Medicare & Medicaid Services (CMS) the authority to create ACOs in two forms. One, the Medicare Shared Savings Program (MSSP), is a large program that does exactly what its name says: it allows physicians and care organizations to share savings with CMS based on their previously-expected health care spending. The other was the Pioneer ACO model run by the CMS Innovation Center (CMMI). This five-year experiment was intended to test if physicians and care organizations could bear both upside and downside risk while still delivering high quality care. The Pioneer ACO program has ended as planned, and CMMI has incorporated its findings from the model thus far into the Next Generation ACO model.  Any other ACO program is a non-governmental agreement between a private insurer and group of health care providers that is neither designed nor controlled by CMS or any other part of the government.
Dr. Koka’s main point of criticism appears to be with the terms of a commercial, non-Medicare, non government ACO with which he contracts. Commercial ACOs tend to have stricter, less-generous terms for physicians; a 2014 study in the American Journal of Managed Care found that commercial ACO contracts were more likely to include both downside risk and upfront payments.  CMS cannot be held responsible for the terms of an ACO contract between Dr. Koka and a private insurer, but I’ll leave that aside for now.
Dr. Koka cites a recent Harvard study on the first year and a half of results from the MSSP as evidence for the failure of ACOs.  This study looked at Medicare claims data for two cohorts of practices–one starting mid-year in 2012 and one starting on January 1, 2013, through the end of 2013. In short, the mid-year 2012 cohort delivered a small amount of savings per beneficiary, and the 2013 cohort achieved a negligible amount of savings. Additionally, some quality measures showed improved performance, while others were the same as the control group. I do not interpret these results as a “failure” at all. These are early results from a generous program that is easing physicians and care organizations into accountable care by limiting the amount of risk that they must take on at first. Equivalent or better-quality care was delivered, along with small savings.
Leavitt Partners, a health care consulting firm, has been tracking and reporting on Medicare and commercial ACOs since 2010. In their recent report on the early takeaways from the MSSP results, they highlighted that physician group-led ACOs tended to do a better job than hospital-only ACOs, and that ACOs residing in high-cost markets were more likely to generate shared savings.  Based on all of these findings, I cannot agree with Dr. Koka that Medicare ACOs are a failure, and I certainly cannot extrapolate from commercial ACOs to Medicare.
The evidence is widespread and irrefutable that our current payment and delivery system has resulted in the highest health care costs in the world, along with some of the lowest-quality care.  We simply cannot continue to pay doctors and hospitals on an unrestricted fee-for-service basis. ACOs are the beginning of a massive shift in how we deliver, pay for, and measure health care in order to address these cost and quality issues.
Dr. Koka also fails to acknowledge a critical point about ACOs: they are generally designed with the Primary Care Physician (PCP) as the central care coordinator versus a specialist. PCPs are best situated to coordinate care for their patients and manage preventive care and population health measures. A more expensive specialist like Dr. Koka should not be the physician responsible for coordinating patient care in an ACO–it makes little sense. One reference point comes from The Accountable Care Guide for Cardiologists from the Toward Accountable Care Consortium. They highlight PCPs and good teamwork as critical central elements in any ACO. 
He also does not acknowledge that it takes time to get accountable care and care coordination right. A PCP or primary care organization is not going to have the tools they need or the right contracts in place with specialists and hospitals on day one. The processes and technology for effectively managing an ACO take time. The initial results from the MSSP prove this out.
Let’s say we assume for the sake of argument that Dr. Koka is right; that ACOs don’t work, and they are a colossal waste of time. Even then, his proposed solution is more than a bit ham-handed. There is no agreement among either the American public or the health care system that we should directly ration care. I suggest that we start by making PCPs the gatekeepers to specialists like Dr. Koka rather than asking him to spend many hours coaxing a patient to take her medications. Undoubtedly, this is what his commercial ACO intended. We need to do a better job of delivering the right care at the right time, from the right physician, nurse, or other provider–yes, this is care coordination.
And if all else fails, well, there is one easy, proven way to slow the growth of health care costs: making a blunt cut in reimbursement rates to providers, as we saw in the Budget Control Act of 2011. I am almost certain that Dr. Koka would not welcome another cut like this. 
If Dr. Koka would like to avoid this last-ditch option, perhaps it is time to partner with primary care organizations and see how he can help them to be a successful ACO…and allow Mrs. K’s PCP and case manager or health coach to field those Saturday calls.
As avid followers of federal health policy will know, this week CMS released the notice of proposed rulemaking for the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. The MACRA encompasses a massive shift in Medicare physician payment. The bad news for Dr. Koka? Accountable, value-based care is not going away anytime soon. The good news is that the proposed payment and delivery system models include more flexibility for physicians and will better reward them for high quality care.
In my opinion, the best news is that the MACRA provides a clear path for our public health care system to move away from fee-for-service once and for all. I hope that Dr. Koka can reconcile himself with a world where care providers, in partnership with patients, are asked to be more accountable for the high cost of health care. At a minimum, I hope that the difference between commercial and Medicare ACOs is now clear.
Lisa Bari is a Master of Public Health candidate at the Harvard T.H. Chan School of Public Health, and previously worked in health IT. She loves primary care health policy, health care payment reform, interoperability, and health data APIs. She never thought she’d own a Harvard sweatshirt. You can find her on Twitter @lisabari.
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Thanks for the well written and well positioned post. However, much of the evidence suggests that consumer-centric care models have robust specialty services with the slightest hint of a medical problem, as long as the specialty services are available. The primary care team is at best consumer-preferenced to focus on care coordination, disease prevention, and disease control through engaged compliance. And often ED event rates for low acuity visits remain steady even as availability and capacity to primary care expands in the area. Consumer-centric care will alter the event rates for various services but may not significantly alter the underlying cost of care. The irony behind Ms. Bari’s comments are that government policy makers see the alternative of cutting provider fees as a solution while accepting the increased cost of pharma, medical devices, IT, facility fees, and benefit designs without batting an eye. Other countries include rationing and price controls as a part of their public policy. There is little evidence, so far, that the United States will be able to avoid these considerations by just focusing on consumer-centric models of care that coordinate care and quality initiatives. More to come….for sure.
Thank you for your response. To be clear, I view a transition to value-based care as infinitely more preferable than broad based cuts. It’s definitely true that we haven’t seen a significant drop-off in ER visits for non-acute care, but to me that simply strengthens the adage that coverage does *not* equal access. Without preventive, patient-centered care (24-hour phone/email access, truly shared medical records, case managers, etc.), it’s going to continue be hard to divert patients from ERs and other expensive care and procedures.
An ACO can control costs only by controlling the activities of physicians. The Medicare ACO wants physicians to be the ones to control other physicians. The gatekeeper model was a complete failure when introduced by HMO’s in the 1990’s. The patient didn’t like it, the specialists hated it and disparaged the Primary Care Physicians, and the Primary Care Physicians didn’t much like it either. It did not work.
The patients will be much happier, and so will the physicians, if the patient is allowed to see the physician they want. Would you really want a Primary Care Physician to be in control if you have severe congestive heart failure, or would you rather have a cardiologist who specializes in congestive heart failure as your primary access to care? Would you want to have your Primary Care Physician check your abnormal looking moles, or would you like to go directly to the Dermatologist? Do you want to see your Primary Care Physician if you have rectal bleeding, or do you want to have the option to see a gastroenterologist or colorectal surgeon?
I lived through this as a Primary Care Physician (although I liked to think of myself as a General Internist), and found it counterproductive to be a gatekeeper in many situations. This doesn’t mean the Primary Care Physician can not, or should not be a coordinator, but he should not be a gatekeeper.
Better to have the outlier physicians undergo review in an ACO, particularly the specialists who perform procedures, and restrict those who, for whatever reason, the ACO cannot come to an understanding with about proper care. The review should be performed by physicians, and not non medical managers. Physicians do not always perform non indicated procedures out of greed. For some it is no more than an incomplete education, or an insecurity in their ability to make a decision. Education can be productive, as I am sure it is practiced in institutions like the Mayo Clinic and the Cleveland Clinic.
Yet another article from a non-front line provider from the ivory tower that will not be around when these so-called ACO’s continue to fall flat on their face. MSSP data that shows little to no savings does not count the massive investment to make them work. Like somehow the cost of coordinating them, doing the IT work/upgrades/programming, the effort and meetings just to get the programs up and running let alone on going costs of coordinating and working the MSSPs. So savings? None, net negative. If something really works and is great for patient care, efficiency, safety, security, outcomes, and the benefit of all, providers will move that direction. ACOs are NOT the answer and never will be. Nor will Advanced Alternate Payment Models, nor MIPS/MACRA nor any of its relevant parts. Its always the behind the desk, policy heavy, Wash DC wonk, non-provider that did some number crunching that thinks they have solved the conundrum of the Triple Aim. Sorry to burst your bubble, but you have no street cred until you walk the walk and actually try to participate in these meaningless, inane, complex programs that do nothing but interfere with the doctor patient relationship. PS yes I am an angry provider that has had enough of this.
You know – that’s one of those insults that doesn’t really hurt. I’m barely part of the Harvard policy-medicine-industrial complex, but I can tell you that there are many smart people here who are also experienced and empathetic–including many practicing clinicians. Furthermore, most of my classmates are MDs or medical students, so I have high hopes that they will bring back some policy and public health knowledge to their practices, and vice versa.
I’m not going to reiterate my points, but I will just say that I hope you get involved and comment on the mechanics through which the MACRA proposes to work. Here’s the link, and comments open on May 9th. https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program-merit-based-incentive-payment-system-and-alternative-payment-model-incentive-under
Ms. Bari you were either fired in your previous life or laid off and you’re getting an MPH to help run these systems that you love, conflict of interest, anyone?
If you care, which you might, here’s a thought. Get in your car and go to the clinics of America. Not in Cambridge, go to Ohio. Oklahoma. Georgia. You will see the cleanest, most spotless and caring facilities on the planet. Perfect? No. Cheap? No. Medical care is ballooning in cost because of myriad reasons posted by others here–liability insurance, nurses, drugs cost, compliance with regs, hiring you to run the ACO–it takes money. It doesn’t grow on trees. The central planners lack the courage to tell the public the credit card is maxed out and we can’t pay for that hip, dialysis, defibrillator anymore. We desperately need tort reform if we’re going to be beholden to “standard of care” on one side and ACO rules on the other. Otherwise nobody is going to risk getting their necks cut off for a government edict.
Although the ACO may appear an organization that charges and is remunerated upon value, the intra-ACO accounting still has to be based upon the FFS sytems of the ICD10 and the CPT systems. E.g, internally we have to reward physicians and take away from physicians depending upon their estimated contribution to a given patient–in very complex pro-ration formulas–and yet we have no “value” codes so that we have to use the older FFS systems, willy nilly. Thus each ACO physician in the care of a patient has to be assigned a prorated fiscal responsibility so that he is awarded fairly or penalized fairly.
The people who want this concept have to help us clump these ICD10 and CPT codes so that their desired valued packages emerge. They can’t hide because it is their packages that they want bargains upon. We cannot guess all that is in their minds.
And when the value packages begin to be the common currency exchange unit of health care, they too will be purchased and sold as FFS with larger wrappings. Providers will be selling larger lumps–that will be the only difference.
Correct. The promise of value based care will be annihilated because it continues to try to be an overlay on FFS, CPT, RVU and the rest of the corrupt lot. Despite primary care based ACOs producing some results, the model will continue to be corrupted by megapractices trying to raid the recent management fad. Patients will continue to be churned through specialist saturated markets and medical inflation will be unchecked. Way to much gaming going on, mostly secondary to unnecessary complexity. ACOs are not a bad idea. But don’t expect the same people who blew it in the first place to solve the issue.
I’m surprised that Dr. Koka doesn’t understand that when the law calls an entity accountable, the entity obeys the law and becomes accountable. And when the law says it puts the primary care physician at the center, the law enacts a Copernican revolution. If Dr. Koka doesn’t believe this, he can only go back a see the effect that the Budget Control Act of 2011 has had on the budget.