May 31, 2011
Accountable Care Organizations: Phoenix Rising or an Albatross?
My last blog described the terribly fragmented healthcare delivery system that nephrologists, and, more importantly, patients have to navigate just to get reasonable care. We all know that this system, particularly for the frail, elderly and chronically ill is terribly broken. Well over a year ago a new savior was introduced to the healthcare/health policy area—Accountable Care Organizations or ACOs. This was touted as a new approach for financing care, but making providers accountable for holistic care of a population of patients, holding providers to specific quality targets, and rewarding excellence in quality, also resulted in financial savings. Most providers understood that to achieve higher quality and constrain costs, reorganization of the delivery paradigm would be necessary and collaboration would be the key to success.
Almost immediately hospitals jumped onto the ACO bandwagon—since in any redesign of a massive system like healthcare there would clearly be winners and losers—and hospitals saw the potential improvement in quality and focus on efficiency eroding their revenues and their influence. They began buying physician practices as a way of mitigating this problem—physician employees would be loyal to the hospital, would accept lower salaries, and all would be well. Some specialties followed this path in lockstep-, more than 70% of cardiologists now work as salaried employees of health systems, primarily hospitals or other integrated care systems.
Nephrologists have always been independent thinkers and have largely resisted making such hasty decisions. While acknowledging that ACOs may provide an opportunity to improve quality and to permit excellent nephrologists to share in the financial savings, they are none too happy about getting in bed with hospitals. Of much more interest to nephrologists is how they might convince the healthcare community and CMS that an ACO structure with the nephrologist as the principal care providers makes the most sense for ESRD patients, and for the overall goals of improving outcomes and controlling costs.
ESRD patients are the prototype of the chronically ill—average age over 60, three to four co-morbid conditions, on eight to 10 different medicines, seeing one to four additional specialists, in the hospital 12 to18 days per year, and despite small numbers (<1% of all Medicare patients), consuming massive amounts of Medicare dollars (7-10%). Recently completed demonstration projects show that the renal community knows how to re-engineer care for this population, drive better care, and lower hospitalization rates and total costs. Delivering holistic care to these vulnerable patients can only be done with the leadership of nephrologists, and the time for this is now. While the preliminary regulations issued by CMS would make an ACO with ESRD patients as the designated members, with nephrologists as principal care providers not possible, the Center of Medicare and Medicaid Innovation (CMMI) is very interested in such an approach. As a renal community we need to fight to make sure that this is an option that is made available to our patients and to us as providers concerned about achieving the best possible outcomes for our patients.
As patient advocates we should be concerned that the complexity of care needed by ESRD patients will overwhelm a general ACO and our patients will either not benefit from the care coordination approach or will be excluded from joining. Neither of these would be acceptable options. DaVita, Fresenius and the Renal Physicians Association are working hard together to educate CMMI on the value of an ACO focused on ESRD patients to the patients and the overall healthcare system. With continued persuasive dialogue we are hopeful that this view will prevail and that pilots of this approach will be permitted soon. For continued information on this topic and to further express your views please respond to this blog and check out the Accountable Kidney Care Collaborative website and its blog as well.
Senator John Kerry said it well: “Fixing our healthcare system as a whole is our primary challenge, and to make it happen you need to get engaged–to pound the pavement, get your hands dirty, endure real sacrifice, take on antiquated thinking and help lead the public debate.”
I look forward to your comments, until next time.
Striving to bring quality to life,
Allen R. Nissenson, MD
To make sure you receive a notification when a new blog is posted, click here!
To comment on this post click here
Bob Gutman said,
June 15, 2011 @ 7:15 am
What The United States Could Learn From Israel About Improving The Quality Of Health Care
Author: Bruce Rosen
Volume: 30
Issue: 4
Publication Date: 2011-04-01
May be summarized:
An important system-level factor that appears to contribute to the more rapid quality gains in Israelcompared to the United States is the tighter organizational linkage betweenhealth plans and physicians in Israel. The linkage is facilitated by the small number of health maintenance organizations in the health insurance market. Most physicians work with only one plan, and even physicians working with multiple plans still see patients from only two to four insurers. In contrast, in the United States the average primary care physician contracts with more than ten health maintenance organization or preferred provider organization plans, as well as other insurers.10
Consequently, health plans in Israel are in a better position to reap the benefits of any investments in changing physicians’ behavior. Accordingly, it makes more sense for them to invest in information systems for the physicians who work with them and to provide them with support staff and outreach programs geared toward improving clinical performance. Similarly, the low rate of transfers among plans (fewer than 2 percent of enrollees switch plans annually) makes it more worthwhile for plans to invest in health promotion activities.
The tighter linkages between plans and physicians also make it easier for Israeli plans to foster an outcome-oriented quality improvement culture, involving intense, quality-focused interactions among physicians, their peers, and health planmanagers. Perhaps most striking, they are able to do this not only among the salaried physicians working in the health plan’s facilities, but also among the geographically dispersed independent physicians working in their own private offices. The organizational, cultural, and social forces at work in Israelihealth plans apparently reduce the need for public dissemination and pay-for-performance to provide an impetus for quality improvement.
Similar to some of the more integrated US health plans, all Israeli health plans are involved in actualcare delivery, particularly at the primary care level. This has contributed to the greater priority given to primary care in Israel and to Israel’s performance on primary care–related indicators. An additional result of this integration is the widespread use of electronic health records from which clinical data can be directly extracted without relying on claims data, with their inherent lags, or retrospective paper chart reviews. This gives Israeli health plans more ability to directly manage and improve the care process.
Another system-level difference is that in comparison with US plans, Israeli health plans function under a more coherent set of incentives and constraints. All Israeli plans operate within a common framework, provided by the National Health Insurance Law. Although Israeli plans still have many degrees of freedom at the operational level and differ greatly from one another in strategy and culture, the common framework among them provides physicians with a more consistent set of messages and incentives than their US counterparts receive.
Another important feature of Israeli health care is that relations between the health plans and the physicians are characterized by a sense of shared purpose: providing optimal health care in a context of resource scarcity. This is fostered by the factthat competition among plans for market share is based on the level of service rather than the cost of service. Because the Israeli health care system is financed predominantly through taxation, there are no premium-related differences across plans. The sense of shared purpose is also promoted by the need for physicians, health plans, and other components of the health system to join forces in negotiations with the Finance Ministry over the level at which the government will fund the National Health Insurance System’s global budget.
Of course, as in the United States, physicians and plans in Israel differ—sometimes sharply—on such issues as the amount of managerial oversight desired and how much physicians should be paid. Still, the sense of shared purpose in Israel, and the resulting trust, makes it easier to cooperate in quality improvement efforts. This sense of shared purpose is much less prevalent in the United States, where many physicians apparently perceive health plans as being far more focused on cost containment than on quality improvement, and where many physicians feel little obligation to restrict care to conserve resources.
Health PlanPractices
Although monitoring and the underlying health systems certainly have an influence on quality, ultimately it is the actions of the care providers themselves that are the direct (and perhaps the strongest) determinants of quality performance. Israeli health maintenance organizations appear to manage the quality improvement effort more intensively than their US counterparts do, and, with the exception of pay-for-performance incentives, they make use of a broader range of managerial tools in doing so. These include supporting physicians’ quality improvement efforts with staff support, patient transportation services, training, and coaching. The Israeli plans work intensively on creating a quality improvement culture and providing operational supports, while the US plans tend to focus more on “arm’s-length” interventions such as providing information or financial incentives.11
In the United States, physician organizations are better situated than health plans to carry out such activities.12,13 However, under the unbundled fee-for-service systems that prevail in the United States, these organizations often lack sufficient incentives to invest in quality-enhancing systems. Ideally, pay-for-performance systems would provide needed incentives. However, the incentives’ effect is often limited by lack of coordination of incentives across the numerous health plans with which the physician groups contract and by their modest size.
…..Borrowing from the sense of common purpose in Israel, US medical groups could provide more support to physicians’ quality improvement efforts. They could contribute resources such as support staff, insights based on their clinical information systems, community engagement activities, assistance with cultural adaptation, and patient transportation services. Physician organizations also could expand on recent innovations in which larger organizations develop relationships to assist smaller practices in quality improvement efforts. This knowledge sharing is vital, as the small and medium-size groups in which many US physicians work face diseconomies of scale in mounting quality improvement efforts on their own.”