Health for life

ACOs at work.

According to this Bloomberg news release, some of Medicares Accountable Care Organizations (ACOs) are already achieving cost savings. Mt. Sinai and Coastal Carolina are reducing emergency room visits while Hackensack is reducing costs.

All three institutions are using two key ingredients:

1) information technology-based risk stratification to identify the persons at greatest risk and

 2) dedicated full-time nurses who perform telephonic and in-person outreach, coordinate care and provide patient coaching that, in turn, is tailored to that risk.

To the DMCB, the good news is that ACOs are using the two approaches that define modern-day disease and population health management. That industrys success will be Mt Sinais, Coastal Carolinas and Hackensacks success.

The bad news is that the news release only addresses half the question: did any savings exceed the institutions cost of the risk stratification and the nurse-FTEs? If the early answer is no, then avoided ER visits and reduced costs could turn out to be much like Governor Christies lap band: so far so good but its still risky and could ultimately be all for naught.

And on an unrelated note, this just-published New England Journal article makes note of "not made in America" health care innovations from overseas that could hold important lessons for the United States. In particular, the authors point out that Germanys DRG hospital payment system includes 30-days of post-discharge care and includes the physician payment. Readmissions within that 30 day window are, with a few exceptions, not covered and physician payment is possible because docs are often employees of the hospitals.

"Interesting!" says the DMCB, but is reminded that Germany is hardly a model for reducing inflationary cost trends.   It also specifically recalls hearing Germanys Minister of Health, Daniel Bahr, express impatience with his countrys DRG system just last week. He criticized it for not advancing enough quality in his keynote address at the HauptKongress in Berlin.

Want to better understand the perpetual anguish of a chronic illness?  Well, thanks to online streaming from the Harvard School of Public Health, readers can better appreciate the eerie similarities between hyperprogressive liberalism and incurable diseases like elevated blood sugars.  Both can go on for decades, are irreversible, cost a lot of money and are ultimately caused by inappropriate choices.  The Disease Management Care Blog is, of course, writing about this hour long video of former Massachusetts Governor and former Democratic Presidential candidate Michael Dukakis.

Sadly for health orm Obamaists, the supremely competent and confident Mr. Dukakis trashes the concept of accountable care organizations at about the minute 35 mark, dismissing it as a reincarnation of 1990s style HMOs and capitation.  And he doesnt stop there. The additional problem, he says, is that well waste ten years analyzing what he foresees will be a foregone conclusion: ACOs are destined to fail. 

Whats more, since health care markets are such a dismal option, he concludes the only choice thats left is price-setting "regulation."  Assume State Insurance Departments have power over hospitals, call everyone into a room, assume theyre decent people, appeal to their economic self interest and everyone will be happy.

Yet, once the DMCB got over Mr. Dukakis "legend in his own mind" persona, it believed the former Governor has a good point: if ACOs fail, well be left with two choices:

1) a governing class who is ready to step in with enlightened top-down governance or

2) a reintroduction of market forces that seeks bottom up competition and consumerism.

In the interest of fairness, if readers want to see a counter-argument in favor of markets, check out this one-sided nine minute Cato Institute video that teaches us weve havent really had a health care market for decades. 

Alternatively, if youre in the mood for neither of the above videos, perhaps your time would be better spent on viewing something that offers far more than either of the options above. 

You Go Bizzle!



Image from Wikipedia

In 2011, the Oregon legislature approved the creation of Medicaid "coordinated care organizations" (CCOs). Once the initiative was granted waiver status by CMS, the "Oregon Health Plan" was launched. Its regulated and funded by the "Oregon Health Authority," which also oversees the health insurance for Oregons public health employees. When it became clear that contracting for the states public employee business was tied to the CCO participation, most of the larger health systems in Oregon responded by signing up to be CCOs.

According to Eric Stecker writing in the Feb 13 the New England Journal of Medicine, "there is a distinct possibility it could fail."

Yikes.

The planning for CCOs was ultimately based on the assumption that its capitation-based payment methodology would achieve a 2% reduction in costs versus a 5.4% trend. That assumption, in turn, enabled Washington DCs waiver that included $1.9 billion in funding. Unfortunately, that money was tied to penalties if the savings are not achieved.

CCOs signed up with primary care medical homes, promises of clinical integration and a commitment to greater coordination of care. Yet, when Dr. Stecker reviews the Oregon health care landscape, he sees little proof that medical homes are achieving large savings, that the arms race of local competition has moderated or that the movement of patients across care settings is seamless and efficient. Whats more, local health providers within the CCOs are largely autonomous and fee-for-service remains the dominant payment methodology for these health systems other lucrative payers. The likelihood that theyre going to change their culture or their clinical work flows to serve the CCO segment of their business is remote.

Dr. Stecker correctly identifies the unproven assumptions that underlie the belief that physician-hospital organizations can cut out the middleman insurers and manage global risk contracts with the pixie dust of medical homes and care coordination.  While those ingredients are necessary, the Disease Management Care Blog agrees that the likelihood of CCOs ending the year with a 2% reduction in claims expense is a stretch. 

The DMCB will stay tuned.