In December, the U.S. Department of Health and Human Services (HHS) announced the selection of 32 organizations from 18 states as participants in the Pioneer Accountable Care Organization (ACO) initiative.
HHS developed this initiative with the hopes that they could save $1.1 billion over the next five years. Five of the 32 participating organizations are Massachusetts-based, including Beth Israel Deaconess Physician Organization (BIDPO) and Atrius Health. My hospitalist colleagues and I at Beth Israel Deaconess Medical Center (BIDMC) are BIDPO members; we also care for hospitalized patients for Atrius Health in Boston. So we will be caring for hospitalized patients involved in two of the 32 Pioneer ACOs.
Many of us are excited, but also understandably a bit anxious. Some of us are outright concerned. I suspect we are not alone. Many of you are in a similar position—being providers in a Pioneer ACO. My colleagues and are having conversations to increase our understanding of ACOs and the role of hospitalists in an ACO.
Nuts and Bolts
An ACO is a system to deliver and pay for healthcare by linking provider reimbursement to quality and cost of care for a defined population of patients. Think of it as a group of providers (primary-care physicians, ED doctors, hospitalists, medical and surgical specialists, etc.) who are bound by shared financial risks and rewards to work together to provide coordinated, high-quality, low-cost care for patients.
In the Pioneer ACO, groups of providers agree to manage the quality, costs, and overall care of the Medicare beneficiaries enrolled in the traditional fee-for-service program assigned to their ACO. The ACO model is designed to address some of the concerns of the traditional fee-for-service payment model, in which each provider offers services and submits their own bills separately. Under the fee-for-service model, the incentive is for each provider to provide as much care as possible, because payment is dependent on provision of more care rather than the provision of higher-quality care.
For example, there is little disincentive for PCPs to send patients to the ED if a patient needs evaluation, for any reason, when it is inconvenient for the PCP. Why keep outpatient clinic open during evenings and weekends when you could simply send the patient to the ED if they needed any sort of care? As an ED doctor, why not set a low threshold to admit patients to the hospital and mitigate any risk of a lawsuit by discharging the patient from the ED? As a hospitalist, why not discharge the patient to a skilled nursing care facility, where they will have more nursing supervision than at home, especially if the hospital, who is contributing to the hospitalist program bottom line, is monitoring your patients’ average length of stay?
Everyone is playing with everyone else’s money. Under the current system, there is little financial incentive for providers to work together in the provision of high-quality care. The ACO model is an attempt to create a model that will provide more integrated care by linking provider reimbursement to quality and cost of care.
Dr. Elliott Fisher at Dartmouth Medical School at Dartmouth College and others have identified several key principles for all ACOs:
- A strong primary-care base capable of being accountable for the quality and costs of care across the full continuum of care for a patient population;
- Provider reimbursement tied to quality improvements that also reduce overall costs; and
- Reliable performance measurement, to support quality improvement.
“ACO” may be a new term to many, but it is not new. Kaiser Permanente and HealthCare Partners Medical Group are examples of longstanding, successful ACOs.
You might be reading this and have arrived at the conclusion that Joe Li is convinced ACOs are the panacea for that ill known as the American healthcare system. That could not be further from the truth. I don’t think that the folks at Medicare are convinced, either. That is why there was a competitive process to select the 32 ACOs for this initiative. They chose provider groups that have experience working together. If ACOs are going to work, Medicare thinks these are the types of organizations that will be successful.
Interestingly, when one looks on the list of Pioneer participants, there are some notable absences. I don’t see Mayo Clinic or Cleveland Clinic. Hmmm. If these ACO “poster children” are not participating, should we? Perhaps they applied and HHS declined to accept their application, but I doubt it. These are the groups who already are ACOs. One can only assume that these organizations didn’t like the rules, or the financial rewards were not sufficiently attractive for them to participate.
Change Is Brewing
Regardless, the big question for hospitalists working in Pioneer groups is, How do we “succeed” in an ACO model? I believe that some of the same principles that allow hospitalists to succeed under the current model also apply under the ACO model. High-performing hospitalists and HM programs have:
Systems to monitor performance and provide feedback to providers with a plan for continuous quality improvement;
Established expectations for hospitalist communication with other providers, including PCPs, ED providers, subspecialists, nurses, and post-discharge care center facilities, among others; and
Multidisciplinary care teams providing evidence-based care with a focus on minimizing variations in care.
If ACOs are successful at providing high-quality care at lower costs, one could imagine changes to our healthcare system that will directly impact hospitalists. If ACOs are able to provide timely and comprehensive outpatient care, fewer patients will need care at acute-care hospitals. Efforts will be made to hospitalize patients at less-expensive community hospitals, instead of tertiary academic medical centers. The resultant smaller population of hospitalized patients will be sicker.
It’s not difficult to extrapolate on this new paradigm, as I can imagine hospitalists seeing fewer, sicker patients daily. These patients, as we all know, often require multiple visits per day. It is difficult to provide high-quality care to sick patients without doctors available in the hospital 24 hours a day, seven days a week. All hospitalists will need the skills to attend to critically ill, hospitalized patients. Hospitalists—and perhaps hospitals, if they are part of the ACO—will focus less on patient length of stay and more on keeping patients out of the hospitals. The cost of an entire readmission dwarfs the cost of one additional day in the hospital.
If you are a hospitalist providing care in a Pioneer ACO, I would love to hear how your practice is changing. Send me an email at [email protected], or message me via Twitter (@JosephLi) or LinkedIn: Joseph Li.
Dr. Li is president of SHM.