ACO — the new buzz word in health care

 

Tuesday’s midterm elections may determine how quickly the federal health reform law will be carried out. But certain aspects of reform will roll along regardless of who wins the most votes.

In health care policy circles, there’s a new buzz phrase – “accountable care organizations” (ACOs). It describes a reform movement that’s trying to reshape the way doctors and hospitals deliver medical care to patients. Some experts believe this is the solution to what ails the American health care system – no matter what Republicans try to do to “Obamacare.”

Essentially, an ACO is a network of doctors, hospitals and/or other health care providers that work together to improve the health of a defined population of people – say, for example, a large company’s employees. The company could contract with the ACO to provide medical care to its employees for a set amount of money; it would be up to the care organization to keep the population as healthy as possible.

If this set-up sounds familiar, it is.

Decades ago, health maintenance organizations (HMOs) were built on the same concept and while HMOs should have worked in theory, they didn’t work in reality for many reasons. One basic reason is that doctors, specialists and hospitals didn’t know how to work together to coordinate patient care in a way that improved and maintained a patient’s health. They know much more about “coordinated care” today.

Also, HMOs didn’t effectively change the fee-for-service payment system — doctors and/or hospitals get paid for every test, procedure or treatment provided, regardless of whether the patient needs it or gets any better for it.

 

Under ACOs, the idea is that doctors not only coordinate and oversee patient care (as it should be), they’ll work with hospitals and other health providers to make sure patients get the care they need — no more, no less – to improve and maintain their health. If it works as proposed, doctors and health providers will be rewarded financially for keeping people healthy.

Last week, a version of this concept popped up in southeastern Wisconsin, when the Waukesha hospital system ProHealth Care and an independent association of doctors announced they would become equal partners in the formation of a new accountable care organization.

Beginning in January, the “ProHealth Solutions” will be ready to contract with employer groups, insurance companies and other payers (likely Medicare) to provide health services to patients.

“Accountable care organizations will move forward irrespective of what happens to the health reform legislation,” says Fred Geilfuss, an attorney who specializes in health care law at the Milwaukee firm Foley & Lardner. The law firm recently published a white paper, “Transforming Health Care Through Accountable Care Organizations: A Critical Assessment.”

Geilfuss says the new federal reform law doesn’t require ACOs, though it does it does encourage them to evolve voluntarily.

 

If successful, they could achieve the “triple aim” of improving the population’s health, improving the quality of health care and reducing – or at least controlling – the cost of health care, Geilfuss says. But nothing about American health care is easy. In order to succeed, ACOs will have to get through lots of business and legal and challenges, Geilfuss adds.

To meet the dual objective of improving health care quality and lowering the costs, ACOs also will have to limit patients’ choices. That means patients covered by an ACO won’t be able to go to any doctor or hospital under the sun. And that makes these organizations an easy target for politicians to distort as health care “rationing” (even though insurance companies have been limiting patients’ choices for decades.)

Still, they are coming. The question is, are patients – and voters – ready?