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Barriers To Accountable Care Organizations (ACOs) Success

Posted Oct 27 2010 7:05pm

Stanley Feld M.D.,FACP,MACE

In response to my last blog about the complexity of Accountable Care Organizations, a reader wrote, “Complexity breeds fraud, waste, abuse and inefficiency.  By nature, huge Government programs are complex and breed all four of the problems mentioned.”

Many of President Obama’s well intended government control programs have experienced terrible outcomes because he followed theories of “experts” instead of using common sense.

President Obama’s theoretical Accountable Care Organizations will be a failure. The pity is ACOs will waste money and destroy medical resources. President Obama’s healthcare reform law is not going to solve the healthcare system’s basic problems.

There are three possible reasons:

1. President Obama does not know what he is doing. He doesn’t understand physicians mentality, the process of medical care or previous physicians’ experiences with government control.

2. President Obama refuses to learn from past history.

Government dictated planning and attempts at execution of social, economic and cultural change usually fails. The government should make the rules to level the playing field for all stakeholders and then get out of the way.

Government planning and controls are expensive to execute for all stakeholders. The planning usually restricts freedom of choice by imposing mandates.

3. President Obama knows exactly what he is doing. He wants the healthcare reform plan to fail.

Failure would lead the way for the government to impose a government controlled single party payer system.

There is no question America needs healthcare reform. Rules to create a more efficient system are essential.

Patients own their disease. They should be put in the power position. Patients should be responsible for their care. The government should set up the rules and protections for patients to be responsible for their care.

The secretary of health and human services is required to establish a program within Medicare in which savings from efficient, high-value care are shared using Accountable Care Organizations (ACOs).

The ACO program of payment is to be launched in January 2012. At this time, only two of the 10 demonstration projects have been partially successful in saving money. The demonstration projects were done in ten clinics that were supposed to theoretically succeed in saving money..

At the moment, there are no real world ACOs exist. The rules and regulations regarding qualification as an ACO have not yet been published. We are approaching 2012.

“In principle, ACOs will efficiently deliver the measurably high-quality care offered by integrated health maintenance organizations (HMOs) without the “lock-in” that many Medicare beneficiaries abhor.”

The author assumes that HMOs delivered high-quality medical care. ACOs payment will be the same as HMOs without the lock in patients abhor.

“ ACOs begin not with insurance but with a collection of providers (physicians and facilities) who come together and accept internal payment arrangements that facilitate the provision of efficient, high-quality care. If the ACO does well, the savings it achieves can be shared among the providers or pumped back into the provision of high-value care.”

ACOs are a fixed payment system. The financial risk is shifted from the government to physicians. Why should physicians pick up the risk for irresponsible patients?

Patients are attributed to the ACO on the basis of their patterns of service use. That is, if a patient typically sees a primary care physician who belongs to an ACO, all of that patient's care is attributed to that ACO. If the costs incurred by the ACO's “attributees” are sufficiently below Medicare's spending projections for that population, the ACO shares in the savings realized by Medicare; if the costs are too high, the ACO loses nothing.

Patients will not have a choice of physicians. The experts predict physicians’ incentives are changed from “over testing” to “under testing” patients. However, physicians will be forced to continue to over test for defensive medicine purposes and the threat of malpractice. I think over testing for defensive medicine will not be solved until effective malpractice reform is passed. President Obama has no interest in malpractice reform.

George Thomas, a New York physician, has posted a blog describing to non-doctors and non-sued doctors what is wrong with the malpractice system and its economic effect on healthcare cost. It is written from the point of view of a physician who has been sued five times and won each suit.

“First, being sued does not make a doctor a better doctor. We improve through experience and studying, and not making the same mistake twice.”

I hope President Obama will read this article. Everyone should read this article. The ACO payment system is destined to fail.

Elliot Fisher M.D. of the Dartmouth group is one of the masterminds of the ACOs.

Dr. Fischer has little real world experience. He has described an attribution rule whereby Medicare beneficiaries are assigned to their primary care provider and then to unique physician–hospital networks. Please note the lack of patient choice.

1.“ ACOs must be able to collect information on the quality of care, create new incentives, and accept and distribute bonus payments. Building these capabilities will entail substantial up-front costs for new legal entities, information systems, and other infrastructure. Large multispecialty groups are well positioned to take on these responsibilities”

Most primary care physicians are not in that position and are unwilling to hand their intellectual property over to a hospital system.

  1. All primary care practitioners will not likely to be invited into or want to participate in an ACO.

The ACO concept will generate severe shortages of primary care physicians. There are important legal antitrust concerns about the corporate ownership of physicians in some areas of the country. The Medical Home concept designed to enable primary care to survive will quicken the specialty’s demise.

3.” The ACO concept calls for each primary care practitioner to be part of only one ACO.”

The practice of medicine will be under the dictates of the federal government.

In spite of this, President Obama has declared the ACO payment system a done deal.

He is misguided.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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