Saturday, May 7, 2011

Leading New Models of Practice - Accountable Care Organizations

ACO - the newest mysterious acronym from Washington. Just when most of us were getting familiar with the last big organizing acronym, PCMH. Maybe we weren't actually familiar with the 7 joint principles of the Patient-Centered Medical Home (PCMH) and their implications, but we were at least getting comfortable throwing the term around in discussions, networking sessions and conferences, hoping that no one would ever ask us: "So, what is a PCMH?" Now we've been hearing about the Accountable Care Organization (ACO)... is this just the newest street language in health policy or is there more to it than that?

Last Wednesday, I attended a full-day workshop sponsored by the Society of Teachers of Family Medicine on the ACO. We started by reviewing the basic premise of the PCMH: central places to coordinate care focused on patients’ needs and relationship-building. Industry leaders who were fed up with poor care options in America created the concept of the PCMH, which was jointly supported by all national primary care organizations. The PCMH model emphasizes a strong primary care foundation in which primary care providers take responsibility for providing, coordinating and integrating care across the health care continuum. Pilots of the PCMH have shown improvements in quality and reductions in spending when implemented in large provider settings.

The conceptualization of ACOs is separate from the PCMH but there are many parallels. ACOs are organizations that can use payments:
  • to incentivize physicians and hospitals to provide care coordination,
  • to invest in infrastructure and redesign care processes and
  • to provide high-quality and efficient services.
Patient-specific metrics are being developed to evaluate outcomes and quality. An example of a metric would be A1c <9% in those with diabetes or providing a post-discharge physician visit. Participation in ACOs is optional. Providers and hospitals that participate would be accountable for a defined population across care continuum. Benefits for participating? You would also get a share in the cost-savings from this model.

You may be thinking right now - this all sounds great. But what you've given me is a bunch of fancy concepts. Where are the examples? Well, the answer is that there aren't really any good examples yet. The ACO is a new model that was outlined in the Affordable Care Act. ACO rules were just released last month by the Center of Medicare and Medicaid Services (CMS). These rules are still open for comments until June 6, 2011 and then are to be implemented by January 1, 2012. Providers and hospitals at that point can apply to be ACOs.

What does this mean for family medicine and for the PCMH model that we helped develop?

It’s an opportunity to get involved! The weakness of the PCMH model is that there is no incentive for specialists and hospitals to get involved because they don’t participate in the savings. Secondly, there’s little financial incentive for even primary care doctors to get involved because the money saved on emergency room visits, tests and procedures isn’t reflected directly in the pocketbooks of primary care doctors unless payment structures are transformed from the traditional fee-for-service to more innovative payment mechanisms. The ACO model helps align these incentives to achieve much of what the PCMH model desires.

However, the ACO model makes no explicit mention of the centrality of primary care. As future primary care doctors, we must lead in the development and implementation of ACOs if we are to remain relevant in the 21st century and to continue serving our patients.


  1. Despite the 400+page proposal from CMS on the specifics of ACOs, I'm still skeptical. I do appreciate the goal of sharing cost-savings, but I'm not certain their is enough incentive to drive large systems to participate.

    At this point, these systems can take advantage of reimbursement for patient admissions every 31 days. So, from the business-side of things, a patient that has 10 stays a year generates significant revenue.

    Contrast that with the revenue savings that can be "shared". It would be impossible to generate the same kind of revenue seen from frequent admissions. It's the right and ethical thing to do for the patient, but it doesn't make the most business sense. And I think large systems have much to risk in entering this model.

    From the perspective of family medicine, I think the ACO is definitely the top-down approach. That means the family doc isn't directly a part of the equation. However, I like to think of everything as a continuum. I like to think of the family doc at the center of the equation, supported by a PCMH. From their, PCMHs can be units within a grand ACO. Why can't these models be integrated?

  2. The commentary is inaccurate in that the law stipulates that an ACO have a minimum of 5,000 medicare beneficiaries and primary care sufficient to care for the population, regardless of its size. Also, alignment of patients with the ACO ("attribution" in the PGP demonstration, the "field test" for this model of delivery)is done using an approach based on the plurality of care given based on charges (to give some weighting to the method) a narrow group of largely primary care E/M services by an FP, GP, IM, or geriatrician. So, I'd say that primary care plays a noteworthy, if not central role here.