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.