Along with announcing that it will not be renewing the contract of Dr. Michael Maves, its chief executive, the American Medical Association (AMA), the Chicago-based organization of physicians, named the practice/payment system model of Accountable Care Organizations (ACOs) as a top advocacy priority. Medicare patient ACOs are already a part of the public health reform strategy and The Center for Medicare & Medicaid Services (CMS) is set to release guidelines this December to providers who want to take part in this program. In addition, the National Committee for Quality Assurance (NCQA), the accrediting organization for health care plans, is seeking comments on their draft quality standards criteria for ACOs no later than November 19, 2010.
The Steward Group can help physician groups and hospital systems answer questions about the best strategies to create workable ACOs.
ACOs are designed to restructure the patient care delivery system to coordinate three primary drivers of medical cost: hospital facilities, patient treatment plans, and physician fees. Hospitals and physicians would share the savings that are realized by the system. On the surface the ACOs look very similar to HMOs. Like HMOs, services and fees are based on agreements between facilities and hospitals. And while there are many variants between ACOs, there remains a key difference between the ACO and HMO. For HMOs, patient use is determined by health care plans. For ACOs, health care plans will have no role. Instead, cost and quality accountability will be fully placed in the hands of providers. Information technology tools such as the electronic medical records will also be put into place so that ACOs won’t suffer the same reporting problems that plagued many HMOs. The AMA also has other concerns about how ACOs could be implemented — chiefly their concern about antitrust, physician self-referral, and anti-kickbacks laws.
The Texas Medical Association (TMA) describes the fundamental goal of ACOs is to “shift the U.S. health care system from volume-based payments to value-based payments”. This TMA goal statement coupled with AMA’s decision to prioritize ACOs immediately after the mid-term Congressional elections effectively repositions ACOs as a private market solution. The Colette Steward Group, however, questions whether ACOs can shift the market to a value-based payment system without government subsidization. In many states, the HMO model did not just fail because of a poor information; HMOs revenues dropped because of inadequate capitation rates.
The health care plan industry believes that they can bring value to the ACO model. The argue that they have the expertise that physician-led organizations do not have when it come to managing risk. (Managed Care News, 9/09) They offer the comments made by Jeff Goldsmith, founder of Health Futures, a health advisory firm. He argues that it is a mistake to “to dismiss the fact that health plans are fundamentally in the risk-managing business and to ignore 35 years worth of institutional learning”.
Recent events indicate that providers may agree with Dr. Goldsmith. Maybe there is a role for health care plans in the ACO model. Norton Healthcare, a Louisville system, and Humana are currently developing plans to form an ACO. This system will offer care to Norton and Humana employees.
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