ACC Corner | Accountable Care Organizations: A Bold New Solution?

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(from left to right) James Dove, MD; W. Douglas Weaver, MD; Jack Lewin, MD. Drs. Dove and Weaver are past presidents of the American College of Cardiology. Dr. Lewin is CEO.

Beyond covering the uninsured, redesign of the healthcare delivery system is essential. Patients and physicians have not been served by the cost and volume controls that have occurred over the past decade and the current escalation of healthcare costs is not sustainable.

Integrated healthcare delivery is currently the favored approach to aligning resource use and costs. Accountable care organizations (ACOs), a concept included in healthcare reform legislation before both the U.S. House and Senate, are viewed as a way to translate the efficiencies and lessons learned from large integrated systems and apply them to nonintegrated practices. In late June, MedPAC suggested that the definition of an ACO could resemble large integrated systems that already exist, as well as academic medical centers and physician-hospital organizations.

The problem, however, is that outside already established integrated systems, government regulations have made it difficult or even illegal for practices and hospitals to coordinate care and quality. Since most of the care is delivered by small groups of physicians that are not connected, the challenge is to allow trials of ACOs that are not legal large partnerships or entities.

This is complicated, and the ACC believes clinicians, patients and payors should have input about the design and function of this new structure. The ACC, for example, believes an ACO should reward providers for reducing unnecessary and discretionary services but not denying necessary care. ACO membersalso should not be at risk for costs they can’t control.

A current Senate proposal has ACOs earning incentive payments by reporting yearly on quality indicators, clinical processes, patient satisfaction, utilization, cost and outcomes. The Centers for Medicare & Medicaid Services (CMS) would assign patients to an ACO based on their primary-care physician’s affiliation and would permit patients to move from one ACO to another. The cost of moving and attribution of care to the various ACOs is unclear.

Under this proposal, physicians would initially be paid on a fee-for-service system, with an expected transition toward a new strategy such as bundling of episodes of care, or capitation. Capitation, however, is mainly a cost-control model, unless future models were accompanied by registry-based measurement and continuous quality improvement systems that could effectively protect against under-treatment and/or less-than-appropriate care.

Identifying long-term incentives for participation is another area needing to be fleshed out in the ACO model.How would quality improvement be rewarded when system improvements have wrought much of the current waste out of the system? One possible goal might be to convert long-term ACO rewards to gainsharing around annualized network-produced reductions in cost increases compared with annual medical inflation or actuarialized expected cost projections.

Since most of healthcare is delivered in the ambulatory setting, it remains to be determined if the ACOs are best developed in parallel among physician practices and hospitals, or as partnerships between hospitals and physicians. There also are concerns that hospital-led ACOs will force physician employment by hospitals with possible unintended negative consequences for physicians, hospitals and patients.

The ACC strongly believes that change in healthcare delivery must be accomplished with patients and physicians at the table. Past policies and the status quo have failed. Bold new solutions are necessary. Experimentation should be encouraged. There are risks ahead, but we have greater opportunities than perhaps ever before to rejuvenate the profession in the challenges ahead.

* Drs. Dove and Weaver are past presidents of the American College of Cardiology.Dr. Lewin is CEO . This article is based on a larger piece published in the Journal ofthe American College of Cardiology (Vol. 54, No. 11, 2009).