Moreover, advances in medical knowledge have not been evenly distributed among healthcare providers, leading to unnecessary variations in how patients with the same conditions are treated.
ACOs are held up as a way to close some of those gaps. They can do that, proponents say, through more-personalized patient interactions, analysis of pooled patient data and insurance contracts that reward hospitals and nurses for avoiding expensive care.
The healthcare policy world has crackled with high-level debate over ACOs in the past several years. A few systems with ACOs have even drawn antitrust scrutiny.
But the types of ACO models being tried today are so varied and complex that it's difficult to draw conclusions about their ultimate success. Despite the unanswered questions, providers are pumping massive investments into ACOs across the nation.
Major questions that still linger include which patients are right for ACOs and how much hospitals and doctors should be rewarded for coordinating patient care. Payment models are also up in the air.
One of the more common payment models for ACOs involves shared savings. When physicians, hospitals and patients work together to reduce the total cost of care for a defined population of beneficiaries, the healthcare providers receive a share of overall savings from Medicare and private health plans.
If that sounds familiar, it should: On paper, ACOs depend on some of the same financial risk-sharing models deployed by the much-reviled health maintenance organizations of the 1990s, which did a poor job in discriminating between necessary and unnecessary care and drew complaints from patients and providers.
ACO organizers are aware of the potential for a similar reaction. To guarantee the public's acceptance of this grand new experiment, many people are kept unaware that they're part of it.
“ACOs aren't facing what doomed the models in the 1990s, which is a backlash,” Ginsburg said. “In fact, probably ACOs have gone so far toward not engaging and not restricting the patients that their risk is that they won't achieve enough traction.”
Medicare to date has certified 252 ACOs. In many cases, the only way a patient finds out that they are in one is when they get a letter asking whether they want to prevent accountable care groups from accessing their Medicare data. Other than that, there's no enrollment for the patient.
Fisher, for one, didn't know what an ACO was and didn't know he was enrolled in one.
But what Fisher and his wife, Kathy, did know was that they had a new healthcare professional in their lives—ACO care coordinator Dorrie Rossell.
A registered nurse by training, Rossell's job is to help the Fishers cut through administrative red tape and get doctor's appointments without having to wait 24 hours or more just to have a phone call returned. Before, interacting with the system was its own source of stress, Fisher said.
“It would take so long to hear from someone that my legs would have gotten so bad that I would go to the emergency room,” he said. Fisher visited the hospital 30 times in the past six years. But he hasn't been admitted to a hospital since Dec. 4—“Knock on wood,” Kathy Fisher said.
“He gets (skin) ulcers, so he's prone to cellulitis. He developed sepsis six or seven times last year,” she said. “So it's getting to the scary point right now. He has congestive heart failure, which causes swelling in his legs. … It's a full-time job for him to just take care of his legs.”
And that's only one disease process. Rossell coordinates care among Fisher's primary-care doctor, pulmonologist, cardiologist, podiatrist, dermatologist, wound-care specialist, infectious-disease doctor and the vascular surgeon with whom Fisher has occasional consultations.
“A lot more responsibility is put on these patients than when I was a nurse,” Rossell said. “In this day and age, with so much technology and so many wonderful things out there, doctors are more specialized. The patients have a lot of different things going on … and they are seeing a different doctor for each one of those things.”
Rossell is more than simply an appointment manager. She checks in on Fisher regularly. She helps him find cheaper drugs when he can't afford prescription prices locally. She once explained test results to him after a doctor communicated the results to all of his providers but not to Fisher.
“There are some patients that I talk to every day. Every single day,” Rossell said. She tracks 80 cases.
“And there are some that I talk to every week, and some every month. And some every two months. With Jack, I'll talk to him every few weeks to say, 'Jack, it's Dorrie. How are you doing? Are you eating all right? What do your legs look like? Do you have a follow-up with your physician?' And he appreciates those calls,” she said.
Healthcare providers see great potential for ACOs in reducing unnecessary expenses for patients with chronic illnesses. A widely cited 2009 article in Health Affairs found that the 133 million Americans with chronic conditions accounted for 78% of all healthcare spending. Both figures are expected to rise sharply by 2023.
Insurance companies that participate also note that ACOs provide a timely catalyst for conversations about reducing another healthcare cost driver: unnecessary variation.
Insurers say reducing unnecessary care can be a quicker and easier route to efficiencies as compared to the more difficult jobs that ACO-bound hospitals and doctors often try first, such as redesigning chronic care and reallocating staff.
“It can save huge numbers of dollars, and it doesn't require transforming the healthcare process,” said Dr. Howard Beckman, chief medical officer for health-data firm Focused Medical Analytics, Pittsford, N.Y.
Beckman said reducing variation as a first step can create savings that will pay for the more difficult and expensive work of an ACO later on, thereby helping an ACO avoid borrowing money to pay for more staff or health IT systems.
But the key to reducing variation is increased use of data analytics. Whether done in-house or by contractors such as Beckman's firm, data analysis uses clinical information on thousands of patients with similar conditions to see where and why some practitioners order more-expensive care that doesn't improve outcomes.
Branded drugs for high blood pressure is a good example, he said. By examining practice patterns, analysts can create data that show how many physicians prescribe branded drugs that cost as much as seven times more than generics without having better outcomes for patients.
That data is then provided to the hospital or physicians' group, which use the analysis to craft their own evidence-based practice models.
“They like … examining their behavior (as a group), knowing where they are similar and different, and coming to consensus about what is a rational range of activity,” Beckman said. “Until it's pointed out in a group, there's no reason to change behavior.”
Some payers and providers believe the process of reducing unneeded care will redefine how healthcare is delivered for specific conditions.
Take obesity, for instance. In many cases, physicians decide that overweight patients with circulation problems need to have vascular stents inserted. While an individual physician might say that a stent would resolve an immediate crisis, a stakeholder interested in population-based accountable care may question the long-term purpose of placing stents in obese people.
“The stent is going to work, but without the complement of behavior modification … all you're going to do is reduce some symptoms. The person is not going to live any longer,” said Dr. Charles Kennedy, head of aligned care solutions at Aetna, which is on track to triple its 130,000 ACO beneficiaries by year's end.
The stent example illustrates why critics say the U.S. has a “sickcare” system. Rather than encouraging obese patients to lose weight or modify behaviors that put them at risk for cardiac and vascular diseases, the traditional system encourages hospitals and doctors to do expensive interventions while leaving the underlying disease process unchanged.
If ACOs succeed in reversing those dynamics, there could be significant downside risk for providers. Hospitals and doctors lose revenue when they prevent patients from needing stents.
This downside risk is compelling some healthcare providers to take on a greater share of the insurance risk so they can share in a larger percentage of the savings in years when the efficiencies pay off. This is known as “gain sharing.”
Medicare's 32 Pioneer ACOs—which were launched Jan. 1, 2012, making them among the earliest accountable care groups—took on that downside risk as of January this year. The group included OSF HealthCare.
Aetna's Kennedy said his company is developing similar risk-sharing arrangements as it pursues similar private-sector ACO contracts.
“We typically begin our relationships with gain-share only mode, because most of our customers are not skilled enough in risk management to manage downside risk,” he said. “When they get confident that they can manage risk, that's usually when they take on the downside risk, and that's usually after about three years.”
The intricate details of those risk-sharing arrangements are completely masked from people such as Jack and Kathy Fisher. Unlike the HMO cost-control efforts of the 1990s, which patients perceived as a reduction in usual care, the Fishers have seen an increase in services in the form of the care coordinator. No one sees avoiding a hospital visit as a cutback.
And there are side benefits, too. “I'm less stressed out,” Jack Fisher said.
“I'm all for it,” Kathy Fisher said. “Because I think it's made our lives …”
“More bearable,” Jack Fisher said.
“More bearable,” she agreed. “When you have health problems, it's hard enough to build a life around that. It's become a self-help medical system.”