coordinated care

Accountable Care Organizations

By Edward W. Pegg, III, MD
ost people are not aware of the fact that the Affordable Care Act, commonly known as the health reform law, encourages the formation of accountable care organizations (ACOs). These organizations are creating big changes in the way medicine is practiced. An accountable care organization is a group of primary care providers, specialists, hospitals, and other health care providers who come together voluntarily to give coordinated high-quality care to their patients. This plan was started in 2012 and the goal is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services. An ACO is similar to the HMOs that were popular in the 1970s. The ACO group is held accountable for providing comprehensive health services to a population, which theoretically should provide higher quality care and spend health care dollars more wisely. The way this works is that a health plan, such as Medicare, contracts with doctors and hospitals to form the ACO. Medicare will then contract with the ACO to care for a certain group of patients. In exchange, Medicare will pay a set amount based on the total number of people enrolled. The ACO will then be responsible for all of the medical needs for this population base, including preventative care, follow-up visits for chronic illnesses, hospitalizations, medications and any other ancillary services such as medical devices or physical therapy. There will also be at least eight quality standards (still in the works) that will be evaluated by Medicare and will most likely be mirrored by the other health care plans. At the end of the year if the ACO over spends the money allotted, they will be fined by Medicare or the health care plan. If however the ACO is able to hold down costs below the agreed-upon amount they will share in the savings. For example, lets say the health care plan allocates $1000 per person. If 500 people are enrolled in the plan, the ACO has 500,000 to work with. At the end of the year, if the ACO spends more than $500,000, then they will pay an extra penalty in the form of a fine. However, if they only spend $450,000, then the $50,000 savings from Medicare's payment is passed on to the ACO as a profit. Doctors and hospitals do not have input into this plan and although it is technically voluntary, if they do not accept the conditions, then they may soon find themselves with no patients What does this mean for patients? First of all, patients are not aware that they are being enrolled in this plan. Their names are simply turned over to an ACO. You really do not have a choice as to which ACO you are part of. Although the government has said that there are no restrictions on patient choice, one has to realize that it is difficult for a hospital or a medical group to hold costs down if patients elect to shop around outside the ACO to take care of other medical conditions or seek out the help of other specialists. This will especially impact ACOs that have a large group of older patients that often vacation in Florida over the winter. Most of these older patients are part of an ACO where their primary home is located, but they have their regular doctors in Florida. If they get sick or have to be hospitalized, the cost is added up and goes against the money that their ACO has to spend. One way to hold down costs will be to try and keep all referrals and testing within the ACO system. This may be difficult at first because a patient may have a primary care in one ACO, a cardiologist in another ACO, and an oncologist who is independent. With the average person over 65 having five chronic conditions, it would not
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be unheard of that the patient could have five different physicians, all either independent or in different ACO organizations. You can see that while the new health care law says that everyone is free to see whoever they want, the new law is actually discouraging this from happening. For example, lets say you have an unusual heart condition and the physician or hospital that is best qualified to diagnose and treat your condition is more expensive than the facility or physician that is part of the ACO. The members of the ACO will be less inclined to allow you access to the more expensive option. The other change that will likely happen with ACOs is since they have to hold down their costs, they must become even more judicious at restricting testing and treatments. In many instances, this is a good thing. There are certainly situations where unnecessary tests or unproven treatments are done and this should promote a more judicious use of testing and only FDA proven treatments. But ACOs cause individuals to have less control of their health care. Instead of discussing options and then making a decision whether to have further testing or treatment, a doctor may be influenced by the cost. Over the year does he allow patients to request tests he thinks are questionable, knowing that he may be threatening the viability of the ACO? Furthermore, there will not be a limitless number of ACOs to pick from. In Bloomington/Normal there will be only two: St. Joseph (OSF health care) and Advocate Bromenn. ACOs are an alternative to hold down health care costs. But the government now has more direct control over what the physicians and hospitals can do. An independent board of 15 appointed (for life, not elected) individuals, who do not have to have any medical background, will be responsible for making decisions on who gets what sort of health care.

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June 2013 Bloomington Healthy Cells Magazine Page 47