The Mayo Clinic is technically one. So are Pennsylvania’s Geisinger Health System, California-based Kaiser Permanente, and the Cleveland Clinic. Beyond the handful of long-established and well-integrated sites being labeled as de facto accountable care organizations (ACOs), advocates are seizing the moment and pushing for a bold vision of what role ACOs will play in the movement to reform the healthcare payment system across the country. In at least two major pilot projects in the works, hospitalists are expected to be front and center in leading the transition.
An ACO is an agreed-upon group of providers bands together to assume joint responsibility for both the quality and cost of healthcare for a specific population of beneficiaries. “What an ACO is trying to do is defragment healthcare,” says Mark Werner, MD, chief medical officer for southwest Virginia’s Carilion Clinic. As long as the group meets defined quality benchmarks, its providers can share in any financial rewards that spring from cost savings. But the providers also share in the collective risk of penalties for poor performance. Using the buzzwords of the moment, an “alignment of incentives” could help “bend the curve” of the sharp upturn in healthcare delivery costs.
ACO advocates argue that by pushing quantity over quality, the current fee-for-service payment system actually punishes providers that coordinate care or promote greater efficiencies; policy analysts are nearly unanimous in decreeing that the current model is fundamentally broken and must be replaced. “Well, actually, it’s not broken,” says Alfred Tallia, MD, MPH, professor and chair of the department of family medicine at the Robert Wood Johnson Medical School in New Brunswick, N.J. “It’s working very well for delivering what we’ve got now, which is not what we need, unfortunately.”
—Ralph Whatley, MD, chair, department of medicine, Carilion Clinic, Roanoke, Va.
The current push for healthcare reform offers the opportunity to make the case for a more equitable, outcome-oriented payment system as a necessary component of any structure that emerges. Many reform advocates in Massachusetts already have moved from asking how to provide more healthcare coverage to asking how the government can afford it, and ACOs have become a favored mechanism for controlling costs.
The general ACO concept has been backed by the nonpartisan Medicare Payment Advisory Commission, and received another boost when the Accountable Care Promotion Act, initially co-sponsored by Rep. Peter Welch (D-Vt.) and Rep. Earl Pomeroy (D-N.D.) in May, was incorporated in its entirety into the healthcare reform bill introduced in the House of Representatives. The bill would launch a pilot program for ACOs for Medicare beneficiaries, while similar provisions within the Senate healthcare reform bill would set up pilot projects for both Medicare beneficiaries and pediatric beneficiaries of Medicaid or the Children’s Health Insurance Program.
Among the pilot projects already planned, healthcare officials at Robert Wood Johnson are hoping to create an academic-health-center-related ACO to link the disparate elements of healthcare delivery across a large swath. “Our vision is really to build the finest 21st-century integrated delivery system for New Jersey,” Dr. Tallia says. “And that would include everything from advanced, personalized in-home and outpatient primary care to high-tech, leading-edge inpatient quaternary care—and everything in between.”
Virginia’s Carilion Clinic was the first to announce its participation in a separate pilot involving the Engelberg Center for Health Care Reform at the Brookings Institution in Washington, D.C., and the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H. Both institutions have been heavyweights in championing the ACO cause. Dr. Werner says Carilion actually began transforming itself into a more coordinated and integrated organization about three years ago, well before the current ACO buzz began. “We always said from the beginning that we were creating an accountable physicians group, where the physician group had accountability for all of the outcomes important in healthcare,” he says.