Three things are certain: death, taxes and, more recently, healthcare complexity. And healthcare is about to become even more complex. The healthcare reform legislation enacted last year authorizes Medicare to contract with accountable care organizations (ACOs) – these are networks of physicians and other providers that could work together to improve the quality of healthcare services and reduce costs for a defined patient population. If providers (hospitals, physicians, payers) don’t lower costs, improve care and boost patient satisfaction, they will be penalized. If they do, they will benefit. It’s that simple and it’s that complex. Hopefully, ACO will not come to be known as Another Convoluted Option.
First, my disclaimer: I’m not taking a position one way or the other on healthcare reform. As a healthcare administrator (provider), I don’t have the luxury of debating the wisdom of policy – I have to deal with it. That’s a big difference. I do believe, however, as many others do, that the current system is unsustainable. It is fragmented, uncoordinated, expensive, and often results in poor quality care. I say that as both a provider of care and a recipient of care.
We need a system that is coordinated and cost-effective, and results in higher quality and improved patient satisfaction. In other words, we need innovative models of payment, care delivery and patient engagement. Admittedly, that’s a tall order and quite far from what we have today.
Substantial uncertainty exists around exactly what the ACO model would look like, as well as whether and how it could work. Rosy aspirations aside, ACOs have serious challenges to overcome. Hospitals and physicians in some specialties benefit directly from maximizing the volume of services they provide. They may not see possible shared savings as enough to offset the revenue they would lose from a reduced use of services. Solo practitioners and small physician groups lack the data systems and organizational structures needed to form ACOs. Another concern is that a few highly integrated systems could capture a large share of the market, increasing their bargaining power with private payers and reducing the potential for collective savings.
A task force of local healthcare providers has been formed to explore the ACO model. The organizations involved include PeaceHealth Southwest Medical Center, Clark United Providers, The Vancouver Clinic, Northwest Medical Associates and Compass NW. Like many groups throughout the nation, I’m sure they are anxious to move from a “think tank” to a “do tank.” It’s that complexity thing again.
There are other types of payment reforms that have not yet been widely implemented or evaluated, including bundled payments for episodes of care, the medical home model and payments to reduce hospital readmissions. Aggressive healthcare reform initiatives are providing incentives for hospital administrators, physicians, discharge planners, home health organizations and nursing facilities to work together for mutual benefit – at least that’s the theory. It seems that healthcare is becoming one big set of pilot programs.
Only by fostering real accountability for both quality and costs will we be able to make the transition to a healthcare system that better addresses major gaps in performance and makes critical clinical and process transformation feasible and sustainable. The ultimate objective is to help providers and patients achieve better health and better care at a lower cost. Because the ACO concept is a new one, it can be expected to evolve over time, as payers and providers learn which models work best. The new prescription for healthcare is collaboration.
Randy Scheel is the associate administrator of Fort Vancouver Convalescent Center. He is also the co-owner of Caretiqe and The Park Lido. You can reach him at Randy@FtVan.com.
