Hundreds of hospitals and medical groups have entered into contracts with insurers (notably Medicare) to deliver savings and quality gains. In return, hospitals and doctors may get a share of whatever they save. The contracts, called accountable care organizations, are popular but experimental and not without uncertainty.
One source of confusion is how best to determine which patients are included under the contract for the purposes of tallying up the savings and measuring the quality. Get it wrong and it could skew savings and quality results.
Now, researchers at Dartmouth University have crunched Medicare data to test two basic strategies for identifying patients. One picks out patients at the start of the contract and the other at the end of each year. The results were published in Health Affairs.
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Doctors with the Beth Israel Deaconess Physician Organization (a group of 900 Harvard University faculty and an equal number of independent doctors) plowed into the second year as an accountable care Pioneer with a new hospital contract, but no performance results for the last six months.
“I kind of wish we knew,” said Dr. Stuart Rosenberg, president and chief executive of the Harvard Medical Faculty Practice, one of Medicare's first and most experimental accountable care organizations (hence the name Pioneers). Pioneers began roughly one year ago (see here for an interactive graphics on their location and vital stats) and hospitals and doctors face potential bonuses or losses based on quality and cost control performance.
Those results, despite federal officials' commitment and wishes, have been slow to come. “It's been a little bit flying in the dark this first year,” he said.
Interest in accountable care has grown among policymakers and the private market and its use in Medicare continues to expand. Medicare this week said it nearly doubled accountable care organizations in its shared savings program as of Jan. 1.
But the experimental payment model is largely unproven. One early test by 10 medical groups over five years failed to reduce spending, according to the Congressional Budget Office.
Jonathan Blum, the CMS acting principal deputy administrator and director for the center for Medicare, speaking to reporters this week said it would be too soon to publicly release results for Pioneers or any of the more than 100 other Medicare accountable care organizations launched last year.
(Rosenberg said doctors also receive dated data from a private insurance contract with incentives—potential for bonuses and losses—similar to accountable care, thought the lag is not so great, a one-month delay for data that is two months old.)
The lack of data does not appear to have dampened interest in the payment model.
Hospitals for the first time this year agreed to share in the financial risk of the doctors' new pay models, Rosenberg said. Hospitals share the risk for high cost hospitalized patients under the new arrangements. The new arrangement will receive $2 million annually each form hospitals and the physicians for investment under the newly created Beth Israel Deaconess Care Organization.
But a large majority of the financial incentives under the program will be paid to primary care doctors, not hospitals. “We think they have been underinvested in and underpaid” and they have value as care coordinators in accountable care, Rosenberg said.
But if primary care doctors succeed, fewer patients may be hospitalized and hospital revenue falls.
Hospitals may benefit another way, Rosenberg said, if the accountable care organization succeeds in attracting more of the market.
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As my colleagues and I reported this week, the re-election of President Barack Obama eased some of the uncertainty over the future of the Patient Protection and Affordable Care Act.
Hospitals and doctors, state policy makers and federal regulators must now grapple with fast-approaching deadlines, the flood of new rules needed to put the law in action and the immediate threat of the fiscal cliff, as Jessica Zigmond and Rich Daly wrote in this week's magazine. But the election secured a champion of the law in the White House for four more years.
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Chilton Hospital officials saw greater access to capital for ambulatory expansion, information technology and other investments to prepare for accountable care as one compelling reason to join a larger health system.
Another reason: The possible arrival in New Jersey of the joint venture between Ascension Health Alliance and the private equity firm Oak Hill Capital Partners to build a Catholic for-profit health system.
Deborah Zastocki, president and CEO of Chilton Hospital, said the independent hospital, which announced board approval for a merger with Atlantic Health System this week, reconsidered its solo status in response to changes in healthcare delivery, but also potential changes to New Jersey's healthcare marketplace.
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Policymakers who hope to see hospitals respond to financial incentives for better quality care will be disappointed by a newly published report on costly, potentially deadly, hospital-acquired infections.
My colleague Maureen McKinney reported on the results, published in the New England Journal of Medicine: The 2008 Medicare policy to stop payment for catheter-associated bloodstream and urinary tract infections contracted by patients during a hospital stay did not produce a hoped-for drop in infection rates.
The rate of bloodstream infections, on the decline before the policy change, continued to drop at about the same pace as before the pay cut, the researcher said.
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The first two years of a Sacramento accountable care experiment cut spending by $50 million, including $13 million that was divided by the participating doctors, hospitals and insurer.
But in year three, those savings have grown more elusive. That's according to Kristen Miranda, vice president of provider network management at Blue Shield of California, which launched the project with Dignity Health, formerly Catholic Healthcare West, and Hill Physicians Medical Group. “It does get harder,” said Miranda.
The partners were scheduled to meet last week to review new strategies for further savings, such as development of patient-centered medical homes, she said.
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Accountable care, like political ads during a presidential campaign, is everywhere these days. And like Kristen Stewart and Robert Pattinson, the frenzy around accountable care organizations have left them overexposed.
For a change, I bring you news of health payment reform that is not accountable care. Starting in September, Kaleida Health, a Buffalo, N.Y.-based health system, will try out an alternative payment model that will put Kaleida's doctors and hospitals at financial risk for the cost of patients' avoidable medical complications.
The experiment, with Blue Cross and Blue Shield of Western New York, will test bundled payments for coronary artery bypass graft surgery using the Prometheus payment formula.
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Diversity is a big issue in healthcare and not just with patients, caregivers and executives. It turns out there's diversity in financial incentives that are part of the accountable care organization phenomenon.
In Maryland, doctors will be paid bonuses later this year tied to quality reporting under a new shared-savings payment model. The experiment includes the state's five largest insurers and Medicaid managed care.
In Minnesota, early results of bundled payments for heart attacks did not yield savings, but similar payments for diabetes, hypertension, coronary artery disease and hip and knee replacements appear on track to share savings with providers in Illinois and Pennsylvania who have had success reducing potentially avoidable complications.
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Pay doctors to churn through patients, procedures and tests, and they will. As a business model, “do more, earn more” has been singled out by policymakers and the industry as deeply flawed and one reason the U.S. spends so much on healthcare.
But, as two health policy experts point out in the Aug. 8 Journal of the American Medical Association, efforts to find another way—including accountable care—have so far produced little change.
Payment for each procedure or visit continues to underpin many emerging accountable-care organizations, including Medicare's popular shared savings program, wrote Drs. Allan Goroll of Harvard University Medical School and Stephen Schoenbaum of the Josiah Macy Jr. Foundation.
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The Robert Wood Johnson Foundation announced plans to spend up to $1.2 million on case studies of private-market accountable care organizations.
The foundation said it would award up to $400,000 each for as many as three projects to study how markets may help or hinder accountable care organizations and ACO results in four areas: quality, cost, patient experience and health disparities.
To qualify as an accountable care organization in the study, an ACO must operate in the private market.
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The Robert Wood Johnson Foundation announced plans to spend up to $1.2 million on case studies of private-market accountable care organizations.
The foundation said it would award up to $400,000 each for as many as three projects to study how markets may help or hinder accountable care organizations and ACO results in four areas: quality, cost, patient experience and health disparities.
To qualify as an accountable care organization in the study, an ACO must operate in the private market.
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