While many expect accountable care organizations (ACO) to speed up the consolidation of small physician practices, health industry members say years may pass before the vaguely defined groups become reality.

 

"We hear from some people that the ACO idea is such a leap, such a quantum leap, that probably 95 percent of hospitals in the country haven't even really begun efforts to attain it," said Mitch Wasden, chief executive officer, Ochsner Medical Center-Baton Rouge.

 

Right now, hospitals, and everyone else, are having trouble finding an existing ACO model to copy, Wasden said. Not even the federal government knows what an accountable care organization will look like.

 

The definition that Ochsner and other providers are working with describes an ACO as a local health organization that's responsible for 100 percent of the expenditures and care of a defined population of patients, Wasden said. Depending on the sponsoring organization, the ACO may include primary care physicians, specialists, and typically hospitals which work together to provide evidence-based quality care in a coordinated model.

 

"So that can look like a lot of different things," Wasden said.

 

Gil Dupré, president of the Louisiana Association of Health Plans, said the ACO model will probably emerge over a period of years, but it is unlikely to be a quantum leap forward in healthcare delivery.

 

"If you look at the history of healthcare over the last 25 years, you'll see an evolution of ideas that involve containing costs, improving quality, and improving health outcomes," Dupré said. "This is in a way, a natural next step for some of those things."
Every development from HMOs to independent practice associations to physician hospitals had supporters who thought this, whatever it was, is going to totally change healthcare, Dupré said. That didn't happen, although each had an effect, and ACOs will, too.

 

But all of the players, the physicians, the hospitals, and employers have the benefit of all those other experiences, Dupré said. That knowledge, some of it helpful, some disappointing, will be factored into ACOs.

 

 "What was touted in the federal healthcare act was something that was going to change healthcare, change the way it's delivered, and make things more cost-effective," Dupré said. "We know that's not going to happen."

 

Still, there is obviously a need for all the interest groups to get together and decide on a different set of incentives, particularly for healthcare practitioners, Dupré said.

 

For the most part, the incentives now reward practitioners who perform services or do procedures, Dupré said. The more a practitioner does, the more he or she gets paid.

 

Medicare pilot programs for ACOs were included in the healthcare reform law.

 

The ACOs are the latest attempt to try and change the way providers are paid, compensating practitioners for taking care of patients and improving their health in as cost-effective a manner as possible, Dupré said.

 

Dupré said although organization is part of the name, an ACO is really more of an agreement among physicians, hospitals, the government and perhaps health plans about how healthcare is delivered and paid for.

 

Wasden said there won't be one monolithic model.

 

Kaiser Permanente may look at the definition of ACO and say it's already there, Wasden said. The U.S. Department of Veterans Affairs might look at the requirements and say the same.

 

The only difference between the VA and Kaiser is that in an ACO, the patient won't be restricted to a single delivery system, Wasden said. Patients will be able to go to other places, and it will be up to the ACO to know where the patients are going and if they are getting the right care.

 

"That's a big challenge. When somebody starts going to another doctor, you just don't know until you see that claims are coming in for other providers," Wasden said. "So what do you do at that point? Do you call a patient and say, 'Why did you go to MD Anderson for care or something like that?'"

 

It will be up to the organization to provide enough value that the patient wants to stay with the organization, Wasden said. The ACO basically improves its financial situation by improving quality so there's a value component.

 

Measuring that will have some really interesting implications where information technology and quality tracking are concerned; physicians will have to re-educate themselves about what they should focus on where the ACO is concerned.

 

The task will be "Herculean," with so many regulatory bodies and quality groups, such as HealthGrades or the Leapfrog Group, and thousands of metrics, Wasden said.

 

There are other unknowns, such as how much savings an ACO will generate, Wasden said. How many people will drop out of the private market and become part of Medicare or Medicaid?

 

No one knows the answer to the first question because no one knows how much it will cost to set up an ACO, Wasden said.

 

Businesses will answer the second question as they learn whether the penalty for dropping their employees' health insurance will be greater than the premiums, Wasden said. If paying the penalty is less expensive, then employers will drop the coverage.

 

Those sorts of decisions will affect ACOs, Wasden said. ACOs, like insurance companies, will have to take on a big enough population to diversify the risk.