January 27, 2011
The Missing Ingredient in Accountable Care
By PAULINE W. CHEN, M.D.

This past week while spending time with nonmedical friends, I found myself referring to what health care experts have been touting as the system’s best hope for the future. My friends, eager to learn more and always game for any clarification of the health care system, leaned in to hear me expound on accountable care organizations, or A.C.O.’s.

Not just another pilot project or policy pipe dream, A.C.O.’s will be legal partnerships between clinicians and hospitals that will be part of Medicare by 2012. As a partnership, these providers will be responsible for all the health care needs of a specific population of patients who are assigned, but are not necessarily restricted, to them. Unlike fee-for-service, payers will give A.C.O.’s a lump sum to cover all care, but the A.C.O.’s will be able to keep any savings that result from more efficient and better care.

In this way, I concluded to my friends, A.C.O.’s will be able to stem spiraling costs, increase efficiency and improve quality. Clinicians and hospitals will have a financial motive not to do more procedures and incur more visits but to keep patients healthy and out of the hospital.

I took a deep breath then looked around. One friend had stood up and was excusing herself to go to the bathroom. The other was looking into her bag, rummaging around for her cellphone.

“Thanks for the explanation, Pauline,” she said. She pulled her phone out and quickly glanced at its screen. “I hate to break it to you,” she continued, “but whatever that care plan is called, it still sounds like an H.M.O. to me.”

For the last few years, but now with increasing frequency and intensity, health care experts and policy analysts have been preaching the virtues of accountable care organizations. While the details of these plans have yet to be worked out for Medicare, the enthusiasm for this model of payment and delivery has gone nearly viral, infecting and making strange bedfellows of third-party payers, state legislatures and politicians on both sides of the aisle. In journals, round-table discussions, blogs and most recently in the Department of Justice, the debate has focused not on whether accountable care organizations should exist but on how they might best be organized and put into action.

Without question, this payment and delivery model does hold promise. But according to a recent editorial in The New England Journal of Medicine, it also runs the risk of becoming yet another failed acronym in health care’s murky alphabet soup. One important group of individuals has yet to be convinced of its merits or to be even included in any of these high-level discussions.

The patients.

“Focusing on payment systems and thinking about incentives for providers is the right first step in making care affordable and efficient,” said Meredith B. Rosenthal, senior author and an associate professor of health economics and policy at the Harvard School of Public Health. “But you can’t just change and assume patients will go along with that.”

One risk is that patients will reject the changes, as they did in the late 1990s. “From the early days of managed care, there has always been this idea of ‘we know what is best,’ ” Dr. Rosenthal said, referring to policy makers and researchers. “And there has always been some suspicion on the part of the patient.”

One way to avert this kind of reaction is by being more transparent about the changes and results, providing patients with information on the quality and benefits of accountable care organizations, as well as using less jargon to relay this information. “We like these acronyms, so of course people are worried,” Dr. Rosenthal said. “We aren’t using plain English.”

Patients who are not engaged with their A.C.O.’s can quickly tip the savings balance. For example, the primary A.C.O. of a patient who decides to have her hip replaced at a hospital that is not part of the partnership must assume the cost of the operation, even thought it exercises no control over any clinical decisions or costs related to the operation. “There’s been a lot of thought in the A.C.O. movement about not forcing patients to get their care from a narrow group of providers,” Dr. Rosenthal said. “But that freedom will also be a huge challenge for the model.”

That challenge could be addressed by creating incentives that build patient loyalty, an idea that few experts or analysts have examined in depth. Some of the ideas that Dr. Rosenthal and her co-author suggest include having patients pay lower co-payments if they stay within their own group of providers or lower premiums if they choose a more economical A.C.O. Private health plans could also assign patients to more efficient, higher-quality groups of providers, then charge more out of pocket if patients decide to see an outside doctor.

While some of these incentives bear some resemblance to H.M.O.’s, they will allow patients to share in the cost savings of their A.C.O.’s. “Patients don’t really want to hear that you’re going to save money for the providers,” Dr. Rosenthal said. “They want to know that if they get care here, there will be some value for them.”

And that value could be enormous in terms of their health. In the current fee-for-service system, clinicians care for patients only when they present at the hospital or the doctor’s office. But accountable care organizations would encourage care beyond these medical confines. “A.C.O.’s offer what we call ‘between-visit care,’ ” Dr. Rosenthal said. “They are about outreach, making sure the right labs are checked and the right medicine is taken. They are about caring proactively for patients and not just reacting to an acute event.”

The support of patients will be crucial for the success of A.C.O.’s. “This idea makes a lot of sense,” Dr. Rosenthal said. “But if we operate in obscurity, we’ll find ourselves back in 1998, when patients really wanted nothing to do with the health care delivery system reforms that were needed to improve care.”

She added, “We can’t afford a replay of the managed-care backlash.”

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