Accountable Care Organization

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Boston’s Mostly Good Results In Health Savings Experiment

Boston is a major player in a critical national health care test: Can focusing on prevention, and paying doctors based on the quality of their care, actually save money?

After the first year of this experiment, the answer is: Maybe.

Nationally, 32 large hospitals and physician groups signed on as Pioneer ACOs (Accountable Care Organizations). 

They agreed to try to save money on Medicare patients while still making sure patients received regular check-ups, cancer screenings and kept problems such as high blood pressure under control. Results out today show that 18 of the 32 groups spent less on Medicare patients than doctors and hospitals outside this pilot project. Most of those who saved money got to keep half the savings.

All 32 groups met the program’s quality goals.  There was a disagreement about how tough the federal Center for Medicare and Medicaid Services should be in setting those 30-plus goals.  The issue may come to a head again this year when quality scores won’t just be reported, they will count towards or against what providers are paid.

Images_of_Money/flickr

Images_of_Money/flickr

In Boston, four of the five Pioneer ACOs spent less money on Medicare patients in the first year of the contract than the federal government projected they would spend if not operating as an ACO:

–Beth Israel Deaconess Care Organization (BIDCO) says it saved 4.2%.

–Mount Auburn Cambridge Independent Physicians Association (MACIPA) says it saved 3.4%.

–Partners HealthCare says it saved 2.4%.

–Steward Health Care says it saved money, but declined to say how much.

–Atrius Health, the state’s largest physicians group lost money.
Update: Atrius Health says a final tally, that includes the first quarter of this year, reduced its loss from 2.1% to .98%. Since this falls within the margin of error, Atrius will not have to return any money to CMS for the first year of the Pioneer ACO program.

Specifically $220 on each of its Medicare patients.  Atrius offered more specific numbers than any of the other Boston Pioneers (as a sort of challenge that the other organizations did not take up). Transparency anyone?

Atrius spent $10,665 on its Medicare patients before becoming a Pioneer ACO, and $10,885 after the first year.

“We thought we’d be at an initial disadvantage,” says Atrius CEO Gene Lindsey, “because we had already harvested much of the low hanging fruit, that some of the organizations might be able to harvest in the first year to show good results.  But the difficult work that would be necessary for sustained results…would really be a long-haul effort.”

At Partners, Vice President for Population Health Management at Partners HealthCare, Dr. Tim Ferris, says he “didn’t expect to be this successful in the first year of the program.”  Ferris echoes Lindsey’s long view. The changes needed to make an ACO work are “a long term effort that will pay off much more in five years than in the first year.” Continue reading

A Coming Out Party For Accountable Care Organizations

Donald Berwick, the former pediatrician and embattled administrator of the Centers for Medicare and Medicaid Services may not have his current job much longer. But he’s making the most of whatever time he’s got left.

Today, in The New England Journal of Medicine, Dr. Berwick lays out a new framework for medical care delivery — the Accountable Care Organization — with an ambitious goal to better organize our fragmented health care system and provide patients with improved, less expensive care. (For more on what, exactly, an ACO is, see our primer here.) Here’s Berwick’s rationale for the new plan, which moved a step forward today when the Department of Health and Human Services issued a notice of proposed rule-making that will define how physicians, hospitals, and others can adopt this new organizational form:

A common criticism of U.S. health care is the fragmented nature of its payment and delivery systems. Because in many settings no single group of participants — physicians, hospitals, public or private payers, or employers — takes full responsibility for guiding the health of a patient or community, care is distributed across many sites, and integration among them may be deficient. Fragmentation leads to waste and duplication — and unnecessarily high costs…

The creation of ACOs is one of the first delivery-reform initiatives that will be implemented under the ACA [the national Affordable Care Act]. Its purpose is to foster change in patient care so as to accelerate progress toward a three-part aim: better care for individuals, better health for populations, and slower growth in costs through improvements in care. Under the law, an ACO will assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to it on the basis of their patterns of use of primary care. If an ACO succeeds in both delivering high-quality care and reducing the cost of that care to a level below what would otherwise have been expected, it will share in the Medicare savings it achieves.

Questions, of course, abound. What will the ACO’s feel like for patients? WIll providers play nicely together on their new teams? Will new incentives undermine quality care in exchange for cost savings? No one knows for sure, but at least Berwick makes clear his priorities as the process moves forward: Continue reading