Sunday, March 25, 2012

Accountability Care Organizations (ACOs)

Tonight’s episode is the case of the Curiously Capitated Conundrum.  The problem: rising health care costs. The proposed solution; globalized payments.  Thankfully you have me to serve as your gumshoe, scrubs wearing detective on this journey.

Let’s start by rounding up our suspects. The list includes hospitals, doctors, insurance companies, drug companies, the government and even patients.  While it would be nice if everyone would just work together the reality is that each have a unique agenda and therefore different motives. The unfortunate patient is being knocked back and forth like a ping-pong ball between rising deductibles, rising premiums and less coverage.

As you can see, it all boils down to the almighty dollar and the constant struggle to get it, to not spend it or to at least spend less of it.  That said, let us now examine the motives of our suspects:

Insurance providers want to cover the most people for the least amount of money. This means they’re likely to conjure up ways to cut the cash flow.  In fact this is exactly what they’ve done by enacting generic mandates, pre-authorizations (for both technology and medications) and high deductibles.  They argue that they have to raise costs because people are living longer, technology is increasingly expensive as are medications.  They further bemoan the recent changes to the health care law that eliminate pre-existing conditions and expand coverage. Their critics assert that if they were just willing to pair down their massive profits and paychecks a bit; there would be plenty to go around.  The government payors simply wants more of everything. More control, more cost restrictions, more tax revenue. 

Doctors want to be paid for what they do without questions or hassles.  In recent years they’ve had pay cut after pay cut as reimbursement shrinks or fails to keep pace with inflation all the while their costs and demands are increasing. E-scribing, EMR’s, increased paper work all come at an expense.  Meanwhile critics portray them as greedy whiners that order unnecessary tests and office visits to pad the bottom line.  If we can eliminate the fee for service, a reward for work done system, docs will buck up and offer better care more affordably.  The same argument is pretty much true for hospitals. 

And the patient? They want the most care they can get for the least amount of money.  Some go so far as to be deluded into thinking the government can provide it for free.  I’m not sure where they think the money ultimately comes from but alas I’ll save that discussion for a different day.  Patients argue that they should be cared for. They shouldn’t be turned away for pre-existing conditions or go into bankruptcy over an unexpected illness.  They should get what they need when the need it.  Critics argue that what is needed and what is wanted is not always clear. They accuse patients of running up the health care tab by clogging emergency rooms unnecessarily and demanding unwarranted tests.  Doctors fear the public, with the aid of their friendly neighborhood lawyer, is sue happy which in turn drives wasted money on defensive medicine. 

So what further can we do to slow costs? Will it work?  Most importantly, what does that mean for you, the patient?
The most popular solution is that of global payments, in one way or another, in place of the traditional fee for service. Under a global payment system, theory goes, paying one set fee to render care hospitals and health care providers will no longer have an impetus to over treat and thereby save money. For example, whether a patient is seen every month, every three months or twice a year the fees remain constant. Other proposals take this a step further making one global payment to a regional health care hub that then is responsible for all testing, doctors, hospital care etc. 

Now global payment systems are not new.  If you’ve been around the game a while you may have heard the term capitation.  It was in play as recently as the 1990s with dubious outcomes.  So much so, the current pundits carefully avoid the term and I included it in my opening paragraph with much trepidation.  In its most modern iteration it is referred to as an A.C.O or accountable care organization. Another variant is termed the medical home. 

Insurance providers (including Medicaid and Medicare) like it for several reasons.  For one, they no longer have to deal with variability.  Bean counters hate variability.  They want to deal with fixed costs. With fee for service they can project their costs for a particular population but can never be sure.  Patients may end up getting more or less care than they projected.  With a global payment it’s a fixed number per patient.  The trick, though, is in determining this capitated amount. I have little doubt it will be a low-balled figure and result in further savings for the insurance underwriter. Other reasons include affording insurance providers added control as well as the ability to shift risk.

But what are the ramifications for you, the patient? So far it sounds good, right?  Well not entirely. Before we accept its success as a forgone conclusion, let us dig a bit deeper. Let us roll around the floor and look at the situation from different angles and analyze the motives of our suspects a bit further. All the while we must not forget that in the end it is about you, the patient. So how will this work for you? 

Like any good caper it comes down to motive.  What are the motive forces at work here?  As mentioned above, the rules are clear; one payment no matter the expenses incurred all in the name of lower costs and improved quality. However, under this global system is not now the incentive to provide the least amount of care possible to the patient?  Has not the motive to flatten costs flipped the system on its head?

Let me illustrate this point a bit further. Consider, for example, a hypothetical patient, Mr. Jones enrolled in his local A.C.O. Let’s say $800 is paid out on his behalf (for the year) to his local medical hub we’ll call Local Care.  Those involved in Local Care know that no matter how much they spend to care for Mr. Jones they’re only getting 800 buckes, no ups, no downs, no extras.  Now let’s say Mr. Jones presents with a cough.  Will they be more or less motivated to authorize chest x-rays, blood testing etc.?  Will they employ more or less doctors?  Will this model positively or negatively impact a doctor’s autonomy?  Critics of fee for service accused the system of testing unnecessarily, will not this system promote under testing? Do you really want your doctor or hospital deciding your fate knowing that the more they do the more they will be penalized?  Do you want your doctors and health care rationed? Does this model not promote rationing?  We all know that life is a delicate and precarious existence wrought with much uncertainty.  Does this system not shift that uncertainty to the shoulders of your health care providers? Should doctors or hospitals be faced with this added burden as they make difficult decisions on your behalf? 

And what of the quality?  Another hopelessly ambiguous idiom being hurled onto the public scene.  What exactly passes for quality care?  For inspiration, let’s look at some of the current practices as they are all too likely to continue no matter what direction we take.  At present, insurance providers rate doctors as rendering high quality if they do it inexpensively and if they achieve certain percentages of health maintenance targets such as colonoscopies.  It’s commonplace for them to track a doctor’s use of generic drugs for example. Do such parameters really measure the quality of the rendered care?  And what do we do with the endless dichotomies they set up?  For example, lets take a hypothetical doctor caring for a diabetic patient.  Said doctor is rated on his or her ability to get the patient’s blood sugars, blood pressure and cholesterol levels down.  This frequently requires multiple medications.  There are generics available, yes, but what of the instances when a branded product is needed? If said doctor uses too many branded products he or she is penalized.  If they choose to forgo branded products or limit the number of medications in exchange for tolerating higher blood pressures or cholesterol levels they’re dinged again for missing their targets. It’s the proverbial damned if you do and damned if you don’t scenario. Then there’s the problem of determining what levels are the norm for a particular provider. Is it fair to compare them to their peers who may have very different patient populations? Is it fair for the provider to take responsibility for a patient’s poor compliance or genetic predisposition?  Again, is this really a measure of the quality of care being provided? Does this not again shift more risk onto the shoulders of the health care provider?  Furtherstill, won’t this promote “cherry picking” amongst providers. After all if I’m going to be judged on how well my patients do isn’t in my best interest to choose more favorable patients?  If said health care provider is now responsible for all of the risk are insurance companies under this system going to give up on their systems that limit access to CT scans or other testing such as burdensome pre-authorizations? 

So what can we conclude?  A.C.O’s and the like are apt to go to far.  There’s a strong probability they will posit a situation in which care is rationed, reduced and restricted under the belief it will slow costs.  Health care providers will be put in the precarious position of trying to do the best for the their patients all the while knowing that if they order tests or medicines they will ultimately be penalized.  Health care providers will wrongly be shifted into the position of bearing the inherent risks of health care in effect acting as if they were an insurance provider themselves. Doctors are likely to see their already vanishing autonomy take another devastating blow.  Faced now with the realization that in addition to being told how to practice medicine they may be told where they can practice as well. Health care in the United States will cease to attract the best and the brightest.  The new climate will stifle new discoveries and technologies and foster a slower, less advanced health care delivery model. Access to care will decline as many health care providers bail out whereas the other salaried drones slow their pace. Surely, insurance providers (both public and private) will like the fixed lower costs and risk shifting but are unlikely to moderate their restrictive practices. And in the end costs may or may not go down but care will likely suffer. The patient will have less options; not more. The true quality of health care as we know it will ultimately go down.   

Case closed boys. 

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