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.
Since 1973, when Jack Wennberg published his first paper describing geographic variations in health care, researchers have argued about both the magnitude and the causes of variation. The argument gained greater policy relevance as U.S. health care spending reached 18 percent of GDP and as evidence mounted, largely from researchers at Dartmouth, that higher spending regions were failing to achieve better outcomes. The possibility of substantial savings not only helped to motivate reform but also raised the stakes in what had been largely an academic argument. Some began to raise questions about the Dartmouth research.
Today, the prestigious Institute of Medicine released a committee report, led by Harvard’s Professor Joseph Newhouse and Provost Alan Garber, that weighs in on these issues.
The report, called for by the Affordable Care Act and entitled “Variation in Health Care Spending: Target Decision Making, Not Geography,” deserves a careful read. The committee of 19 distinguished academics and policy experts spent several years documenting the causes and consequences of regional variations and developing solid policy recommendations on what to do about them. (Disclosure: We helped write a background study for the committee).
But for those trying to make health care better and more affordable, whether in Washington or in communities around the country, there are a few areas where the headlines are likely to gloss over important details in the report.
And we believe that the Committee risks throwing out the baby with the bathwater by appearing, through its choice of title, to turn its back on regional initiatives to improve both health and health care.
What the committee found
The report confirmed three core findings of Dartmouth’s research.
First, geographic variations in spending are substantial, pervasive and persistent over time — the variations are not just random noise. Second, adjusting for individuals’ age, sex, income, race, and health status attenuates these variations, but there’s still plenty that remain. Third, there is little or no correlation between spending and health care quality. The report also effectively identifies the puzzling empirical patterns that don’t fit conveniently into the Dartmouth framework, such as a lack of association between spending in commercial insurance and Medicare populations.
My father, sister and I sat in the near-empty Chinese restaurant, picking at our plates, unable to avoid the question that we’d gathered to discuss: When was it time to let Mom die?
It had been a grueling day at the hospital, watching — praying — for any sign that my mother would emerge from her coma. Three days earlier she’d been admitted for nausea; she had a nasty cough and was having trouble keeping food down. But while a nurse tried to insert a nasogastric tube, her heart stopped. She required CPR for nine minutes. Even before I flew into town, a ventilator was breathing for her, and intravenous medication was keeping her blood pressure steady. Hour after hour, my father, my sister and I tried talking to her, playing her favorite songs, encouraging her to squeeze our hands or open her eyes.
Doctors couldn’t tell us exactly what had gone wrong, but the prognosis was grim, and they suggested that we consider removing her from the breathing machine. And so, that January evening, we drove to a nearby restaurant in suburban Detroit for an inevitable family meeting.