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Why Accountable Care Organizations (ACOs) Will Fail To Reduce Costs

In an ideal world ACOs should work. There is no evidence that  untested and complex organizational structure of ACOs developed by Dr. Don Berwick (head of CMS) will improve quality of care and reduce costs.

ACOs are supposed to provide financial incentives to health care organizations to reduce costs and improve quality. There are too many defects in the ACOs infrastructure to improve the financial and medical outcomes.

At a conceptual level, the incentive for ACOs would be to increase efficiency and avoid overuse and duplication of services, resources, and facilities. In this model, ACO members would share the savings resulting from the increased coordination of care.

I have said over and over again that excessive administrative fees and ineffective management of chronic disease is the main source of waste in the healthcare system. ACOs do not deal with these main drivers of costs.

The only stakeholders who can demand that this waste be eliminated are consumers/patients. Patients must control their healthcare dollars.  They will make sure there are competitive prices and will not permit duplication of services. Read more »

*This blog post was originally published at Repairing the Healthcare System*

Accountable Care Organizations (ACOs): HMOs With Lipstick?

Thousands of articles have been written about forming ACOs. Millions of dollars have been spent by hospital systems to try to form an ACO. Healthcare policy consultants have discovered a new cash cow.

Hospitals systems are wasting their money. They think the return from owning salaried physicians’ intellectual property will be more than worth the cost.

  1. Thousands of physicians have been confused by the concept of ACO.
  2. Many have felt ACOs are an attack on their freedom to practice medicine the best they can.
  3. Many have rejected the concept because they feel they will have to be salaried by hospital systems.
  4. Many physicians do not trust President Obama or Dr. Don Berwick.
  5. The Stage 2 ACO regulations are not easy to understand. They are more ominous than the stage 1 regulations.

The two core stated objectives for ACOs are:

(1) Reducing healthcare costs.

(2) Preserving and improving quality.

The stated objectives are laudable. The government regulations and controls are confusing. Read more »

*This blog post was originally published at Repairing the Healthcare System*

Why Accountable Care Organizations (ACOs) Will Not Solve Our Healthcare Cost Crisis

In 2009 President Obama stated that Accountable Care Organizations (ACOs) were going to be pilot programs in real world settings. The goal was to see if they effective in reducing costs and increasing “quality of care.” The results of the pilot programs have not been published.

Last week despite the lack of proof of concept HHS and CMS announced new proposed regulations for ACOs.

The new delivery and payment model the agency estimates could serve up to 5 million Medicare beneficiaries through participating providers, and also potentially save the Medicare program as much as $960 million over three years.

How were these estimates derived? It could be another accounting  trick by President Obama’s administration.

The idea of coordinating care and developing systems of care is a great idea theoretically. From a practical standpoint, execution is very difficult.

I tried to execute something similar in 1996 with the American Association of Clinical Endocrinologists; a national Independent Practice Association. AACECare received little cooperation or interest from Clinical Endocrinologists.

The problem is coordinated medical care is dependent on physicians cooperating and not competing with each other.  It also depends on  hospital systems developing an equitable partnership with physicians.

The equitable partnerships between hospital systems and physicians are difficult to achieve if past results are any indication of future results. Read more »

*This blog post was originally published at Repairing the Healthcare System*

Physicians Wary Of Healthcare Reform Models Intended To Save Primary Care

When I talk to internal medicine audiences around the country about the latest health policy flavor of the day – accountable care organizations (ACOs) – a typical reaction is skepticism trending toward cynicism. Many don’t quite get what ACOs are all about and certainly don’t want to be lectured about how they need to re-invent their practices. And they don’t buy the idea that ACOs will somehow save internal medicine primary care. The same can be said, perhaps to a lesser extent, about their reactions to PCMHs (Patient-Centered Medical Homes), P4P ( pay-for-performance), HIT (health information technology), MU (meaningful use), and the whole alphabet soup of other reforms being proposed to reform health care delivery and payment systems.

And who can blame them? Older internists have seen this all before, and the word has gone out from them to medical students and younger doctors not to trust policy prescriptions that promise to save primary care. Read more »

*This blog post was originally published at The ACP Advocate Blog by Bob Doherty*

Measuring The Patient Experience

There’s a growing recognition within the medical-industrial complex that the patient is a key element of the enterprise, and that patient satisfaction, patient experience, patient engagement, patient activation, and patient-centeredness are very important. Some research shows that patient activation yields better patient outcomes, and that patient activation can be measured.

Patient-centeredness and patient engagement are two of the key metrics to be used by the feds in describing Accountable Care Organizations (ACOs), if the internecine battles within government are resolved soon enough to actually release draft ACO regulations in time to allow for sufficient advance planning for the January 2012 go-live date. (Wearing one of my many hats, I’ve had the opportunity to submit a response to CMS regarding the RFI on these metrics on behalf of the Society for Participatory Medicine.) These measures go into the “meaningful use” hopper as well, as meaningful use stage 2 metrics are being reviewed.  

In recent years, the federales have been measuring patient experience using the Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, and — coming soon to a bank account near you — there will be Medicare dollars tied to the scores on these questionnaires, not just dollars tied to the act of reporting scores.

As this emphasis on patient experience is unfolding, the Leapfrog Group is adding its voice to the chorus. I spoke this week with CEO Leah Binder and hospital survey director Matt Austin about the new patient experience measures they are adding to their 2011 hospital survey. In keeping with past practice, they will be asking hospitals to report three CAHPS measures (rather than asking folks to collect and report new measures). The three were selected as being representative of a hospital’s broader performance with respect to patient experience, and also because hospital performance on these measures is all over the map. Read more »

*This blog post was originally published at HealthBlawg :: David Harlow's Health Care Law Blog*

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