Can We be “Accountable”? Payment reform and the “Accountable Care” organization. Part I

Payment reform is an inevitable component of the healthcare reform movement. Our current system of piecework payments for each episode of care encourages providers to do more tests and procedures and to see patients in brief, problem-focused episodes. People with chronic illnesses, who are often prodigious consumers of healthcare, are especially disadvantaged under this kind of arrangement because there is no incentive for their multiple physicians to coordinate their efforts and to provide a consistent message. But, in the end, we all pay the price for our current system because it is very costly without offering many of us additional benefits. Fee-for -service care too often results in tests and procedures being performed for marginal indications and discourages the use of preventative care. If we insure more people and do not alter the current payment system, we will simply spend more money and not be any healthier.

One of the proposed alternatives to fee-for-service care is the creation of so called “accountable care” organizations or “ACOs” for short. However, the ACO moniker actually encompasses a fairly broad spectrum of organizational models and which, if any of these will dominate the new landscape of healthcare is, as of yet, unclear. ACOs do share one essential feature; they make providers partially responsible for the healthcare delivered to a population of patients. Rather than focus on what was done for or to a patient, ACOs focus on costs and outcomes. In their simplest form, ACOs are groups of loosely affiliated physicians and other practitioners who agree to meet certain rudimentary quality standards and to reduce costs. If they are successful, the providers usually receive a portion of the savings. At the other end of the spectrum are tightly integrated groups of providers that include practitioners, hospitals, imaging facilities, etc. These organizations receive some of their compensation in the form of prospective payments and assume some risk for meeting quality and cost targets. If they fail to keep costs down and maintain quality; their income is reduced.

Clearly, no system of payment is perfect. Fee for service may result in waste but prospective payment, also called “capitation”, provides an incentive for providers to withhold indicated care. So, for ACOs to provide real benefit without causing harm, costs and quality need to be balanced. That means that ACOs must have an incentive to provide preventative care like immunizations and disease screening tests. There is general agreement that these things work reasonably well to prevent illness when possible and to detect it early when it cannot be prevented. However, prevention and early detection will only go so far in the quest to provide more healthcare for less money.  The real cost savings are going to be found in better management of the millions of people who live with a chronic illness or who have an acute but serious illness that will require long-term treatment. Experts have suggested that the answer in these cases is the development of “evidence based” guidelines and care pathways. By following these guidelines, we should be able to do more of what is known to work and less of what is not helpful. Some practitioners have railed against this concept on the basis that it takes away the “art” of medicine and forces physicians to follow a “cookbook”. But that is not the real problem. In fact, for diseases for which we know exactly what to do, the medical literature is relatively clear that the “cookbook” provides safer and more reliable care and so called “high-reliability” industries use protocols and checklists routinely. No, the major problem is that, for many conditions, the evidence is unavailable or is contradictory and for many others, investigation continues to uncover newer and better management techniques so that the “right” way to manage patients keeps changing. In such instances, there is no clear metric for quality but costs are relatively easily determined. The danger in such instances is that care will be denied if providers have too much incentive to control cost and no clear yardstick for quality. When the “right” course of action is uncertain, the patient must be given the benefit of the doubt.

There are three additional barriers to the implementation of “accountable care”. First, the medical-legal system as currently designed employs 20/20 hindsight and uses adverse outcomes as the sole determinant of the “standard of care”. If costs are truly to be controlled then doctors who follow evidence-based guidelines must be held harmless when the patient’s outcome is worse than expected. Second, healthcare is a team sport and patients play a key role. Billions of dollars of healthcare resources are expended annually in the care of problems that result from people choosing an unhealthy lifestyle and from non-compliance with treatment regimens. If physicians are to be held accountable for their patients’ outcomes they need patients who are willing to work with them. In order for ACOs to work both physicians and their patients must be “accountable”. Third, and perhaps most important, human physiology is not completely understood. It may well be that evidence-based guidelines that are ideal for one sub-set of the population will fail utterly in other groups. Since these differences are likely to be genetically linked it is possible that there will be difference in outcome based upon region, gender, and ethnicity. By chance alone, some protocols of care might work better simply because they were validated in the “right” population and yet these same protocols might be ineffective when applied to a different group of people.

Despite all of their possible failings ACOs have one additional benefit; they are not the way we have been doing things. There is a saying, sometimes attributed to Albert Einstein,  that the definition of insanity is to keep taking the same actions but expect different results. Our current system of healthcare payment results in too much being done for some and too little for many. At least ACOs provide an incentive for preventative care and for evidence-based management. Whether their virtues outweigh their vices remains to be seen.