A new health care model

Accountable care organizations are among the most talked about components of the new national health care law, and the Caritas Christi hospitals are in the process of becoming one. But what will ACOs look like and how will they operate?

By Neil Swidey
February 6, 2011

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What is an accountable care organization?

The new health care law is still taking shape, so no precise definition exists, and ACOs may take different forms. But, the basic idea is to create integrated networks of physicians and hospitals that will each be its own enterprise, sharing responsibility for taking care of a population of patients. The goal is to provide care that’s so coordinated – aided in part by shared access to electronic medical records – that it improves quality and reduces costs.

How would an ACO deliver care differently?

Currently, most patients – whether they have Medicare or private insurance – get their care through a fee-for-service arrangement. Their doctors or hospitals are paid for every office visit, test, or treatment, based on rates negotiated between the provider and the patient’s insurer. Critics of fee-for-service say it can give doctors and hospitals an incentive to order more tests and visits and provide duplicated services, often with no improvement in quality. The long-term plan for ACOs is for insurers to give them a lump-sum annual payment for each patient, based on his/her age and health history. However, the move would probably begin with the addition of financial incentives to the fee-for-service system in which the ACO would be rewarded for keeping costs down and meeting certain quality benchmarks.

What do proponents like about ACOs?

They argue that ACOs will reduce the waste and confusion of the current system, where patients are sometimes ping-ponged from doctor to specialist to hospital, with each provider having its own systems and sometimes competing incentives. They also say the ACOs will give doctors a greater incentive to practice more preventive care, so patients are more likely to stay healthy and less likely to need office visits and treatments.

What do critics fear could happen with ACOs?

Critics ask: Do you really want your doctor being able to see how much money you’ve already cost the system before deciding whether to order a test or provide a service? Do you want your doctor directing you to a certain hospital not because it has the best services for treating your condition, but rather because it’s the lowest-cost provider? Critics also paint a scenario in which ACOs, rather than bringing down costs, could actually increase them by creating powerful provider networks that dominate their markets.

How might all these changes affect the kind of medical care a patient receives?

That remains to be seen. On the plus side, you might spend less time printing the same information on reams of multi-colored forms at every medical office you visit. Your doctor might also spend more time helping you create a regimen for staying healthy, and you might hear more regularly from him or her electronically. On the negative side, you might find surcharges for choosing providers out of the ACO network and more resistance to lots of office visits. A lot depends on how your ACO is put together. If it consists of your local doctor, your local community hospital, and a large academic medical center to provide for the most complex care, that arrangement could create a situation where it is in the interest of all those providers for you to have the majority of your care delivered at the less costly community hospital.

Why is there so much change on the horizon in health care?

Doctors, hospitals, and insurers are scrambling to forge alliances and create new models for delivering reliable care more affordably, spurred on by the perfect storm of rising health care costs, shrinking Medicare and Medicaid reimbursements, and growing requirements of the new national health care law.

SOURCES: Kaiser Health News, American Medical News, California Health Plans, The Boston Globe

  • February 6, 2011 cover
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