Questioning accountable care

by Bernadette Starzee

Published: August 24th, 2011

The North Shore-Long Island Jewish Health System is taking the plunge into newly charted waters.

The Great Neck-based health behemoth applied to be part of the federal government’s “Pioneer Accountable Care Organization” program for Medicare patients, scheduled to kick off in January. ACOs are part of the Affordable Care Act, the historic and controversial initiative signed into law by President Obama last year.

An ACO is a network of health care providers agreeing to be accountable for the care of a defined population. The goal of the program is to improve the quality of care while cutting costs. Rather than the fee-for-service model, reimbursements are based on the achievement of defined performance goals.

In the standard fee-for-service model, health care providers are reimbursed for services they provide, such as appointments and tests. If a patient is given four MRIs in a year, for example, providers are reimbursed for all four.

However, with the ACO concept, the ACO receives bundled payments to take care of a population, sharing savings as well as risk. The providers are reimbursed based on meeting “quality standards.” In the case of a cancer patient, for example, who should get four MRIs, the provider will be reimbursed for following quality standards. However, if the quality standards dictate that a particular patient should only get one MRI every five years, the provider will not be reimbursed for the four MRIs.

“A valued-based payment system, such as this, incentivizes health-care providers to coordinate care,” said David Manko, who chairs the health services practice group at the Uniondale law firm Rivkin Radler. “Numerous studies show if a network of providers are able to coordinate care better, this would reduce spending, as it would cut down on duplication of tests and other services. In cases of chronic illness, the evidence shows that better coordination of care keeps patients healthier and out of the hospital, resulting in lower costs.”

Smaller pilot ACOs have been conducted around the country with success. North Shore-LIJ has done its own smaller pilot ACOs, including one with its employees, which seems to work.

“We put the program out there, and, as a result, more employees have come into the system, reducing our trend line in terms of employee health-care spending,” said Howard Gold, senior vice president for managed care and business development for North Shore-LIJ. Employees were invited to sign up for the system’s health and wellness program, enticed by discounts on their premiums in return for pledging to stop smoking, lose weight or join a health club. “The goal is to keep healthy people healthy and to get the ‘worried well’ to stay well and hopefully become less worried,” Gold said.

Next, North Shore-LIJ is rolling out an ACO system for the management of complex diseases, such as diabetes and cancer, among its employees.

If it’s accepted into the Pioneer ACO program with the Centers for Medicare & Medicaid Services, North Shore-LIJ’s ACO would encompass about 1,000 of the physicians in its network, and patients of those doctors would comprise the population.

Waiting to see

But jumping on the ACO bandwagon is not simple, and not without risks. There’s a question of whether the Affordable Care Act will withstand legal challenges, said Kevin Dahill, president and CEO of the Nassau-Suffolk Hospital Council, a Hauppauge-based trade organization.

Among NSHC members, “one school of thought is, if they’re not sure if they have the infrastructure and capital to set up an ACO, they might be better to sit on the sidelines and watch others go and see what happens,” Dahill said.

Gold acknowledged ACOs are an experiment that might not work. “But we believe it’s the future and that we would eventually have to do it anyway,” he added.

Push back

Centers for Medicare & Medicaid Services, or CMS, is working on guidelines for a broader “Shared Savings Program.” A first set of guidelines, released earlier this year, was met with widespread backlash from the provider community.

The document, which was hundreds of pages long, outlined a host of stringent financial, clinical and technical requirements. “There were a lot more requirements and they were a lot tougher to meet than had been expected,” said Jonathan Goldstein, executive director for Beacon IPA, a Manhasset-based network of more than 225 physicians.

Besides the stringent requirements, the sheer size of the document created confusion about how the program would be implemented. CMS listened and is working on a revised set of guidelines for the Shared Savings Program. “There is a lot of optimism in the health care community that the final Medicare Shared Savings Program regulations will be better,” Manko said.

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Working the system

In addition to the government, insurance companies are exploring the ACO model. Aetna announced it’s setting up an ACO division, whileEmpire Blue Cross Blue Shield is exploring the concept with its physician groups.

Many physicians have expressed concern over their exposure if savings are not, in fact, realized. They’re also worried about clinical guidelines and limits to their autonomy when dealing with individual patients.

However, Goldstein noted physicians are open to alternatives to the current fee-for-service model with its “hamster-on-the-wheel” mentality, requiring doctors to see a high volume of patients in a day to have a viable practice.

“On one hand, the ACO model is frightening as hell, as it will require a whole transformation of how health care is delivered,” Dahill said. “On the other hand, it’s exhilarating, because it will break down silos and get entities working together to put the patient at the center and achieve better outcomes for patients.”

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