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Accountable Care Organizations: An Opportunity To Transform Care



April 22nd, 2011

The latest study, out last week, shows one in three patients in the hospital may experience a medical error—an incidence almost ten times higher than previously assumed.  Health care costs still make up approximately 17 percent of GDP—about $2.5 trillion dollars a year—and are rising three times faster than inflation.  Unfortunately, it continues to be just business as usual for the US health care system.

But health care reform gives us some special opportunities to change the status quo by pushing for higher standards for care quality and affordability.  The release of the federal government’s proposed regulations for Accountable Care Organizations (ACOs), a new model for care delivery to Medicare patients that was authorized under health care reform, has created one of these windows of opportunity.

With regulations just out for comment, already many health care providers are pushing back, lamenting that the regulations are too onerous.  The complaint has appeared in several forums lately, including this blog.  A common concern is that achieving the maximum payments depends on providers reporting and performing well on too many measures of quality.

But health care reform shouldn’t guarantee continued profits for doctors and hospitals that continue to practice at today’s levels of quality and cost. Notably those that have failed to reduce medical errors, improve outcomes, or control costs should not be rewarded. For ACOs to truly deliver better care at a better cost, those providers who decide to participate in ACOs must improve their performance in three areas.

Delivering Patient-Centered Care. First, ACOs and their participating providers need to deliver care that is patient centered.  They must coordinate care among all the doctors, clinics and services that touch the patient, involve the patient and family in making key decisions and caring for themselves, and respect the wishes of the patient.  Study after study has proven that this approach improves care outcomes.

Measuring And Improving Outcomes. Second, ACOs need to measure outcomes of care and be rewarded for helping patients achieve good health.  Like in any industry, doctors and hospitals should measure and strive to improve the various processes they use to deliver care.  But the true test of their performance is whether or not people achieve better health outcomes.  It is not the number of measures that counts; it is about using and acting upon the right measures.  ACOs must measure patient outcomes and make those results public, so that other patients can decide where they can get the care most likely to help them achieve the results they seek.

Doing Better, Not More, And Maintaining Competition. Finally, we need to insist that ACOs pay providers for improving the health of the population they care for, not for the number of appointments or services delivered.  Across America, more than 98 percent of medical payments are still just based on doing more, not doing better.  The days of getting paid more for doing more—regardless of the outcome—need to end.

We need to ensure that ACOs don’t appear to manage costs merely by charging higher rates to some payers while cutting the price to Medicare.  Purchasers cannot afford another cost-shifting game, nor can they tolerate ACOs that so dominate their markets that they can skew prices higher. Payment reform is key but market competition is essential, too.

A Time To Demand Real Change

Only half of the people in this country receive recommended care. There are continuing reports of medical mistakes, and there is a tremendous variation in quality from town to town and across the country. We know some providers do a better job than others.  Health reform means moving beyond business as usual to support and reward those who deliver high quality care at an affordable cost.  ACOs have the potential to change health care in America, but only if we set the bar high for quality and affordability and demand real change.

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