ACOs: They won t work for the same reason HMOs didn t work. Presenta:on to TCMS February 17, 2011

Transcription

1 ACOs: They won t work for the same reason HMOs didn t work Presenta:on to TCMS February 17, 2011

2 Congressional interest in reforming the SGR, and Fisher, brought us the ACO Together, the Medicare Payment Advisory Commission and [Elliot] Fisher provided the impetus for the current concept and interest in ACOs. Kelly Devers and Robert Berenson, Can Accountable Care Organiza:ons improve the value of health care by solving the cost and quality quandaries? Urban Ins:tute, October 2009, P 2 h[p:// accessed February 3, 2011.

3 Deficit Reduc:on Act of 2005 required Medpac to report on SGR alterna:ve The report must discuss disaggrega:ng the current [Sustainable Growth Rate method of upda:ng the Medicare physician fee schedule] target into mul:ple pools using five alterna:ves: Group prac:ce, hospital medical staff, type of service, geographic area, and physician outliers. Statement of Dana Kelly, transcript of Medpac s October 5, 2006 mee:ng, P 3, h[p:// accessed February 8, 2011.

4 Fisher presented extended hospital medical staffs to Medpac on Let me briefly describe the general approach we've taken to assigning pa:ents. If a physician works in an inpa:ent sejng, we assign them to the hospital where they provided care to the greatest number of Medicare beneficiaries [they] saw. If they get no inpa:ent work, we assigned him to the hospital where the plurality, or actually the majority in most cases, of their pa:ents they billed for were admi[ed. It turns out, not surprisingly, that you can assign virtually all physicians billing Medicare to a hospital. Tes:mony of Elliot Fisher to Medpac, November 9, 2006, PP , h[p:// accessed February 5, 2011.

5 Examples of how Fisher s a[ribu:on of pa:ents to primary care docs worked Doctor who treats 40 pa:ents in Hospital A, 30 in Hospital B, and 30 in Hospital C is assigned to Hospital A. Doctor who does no inpa:ent work is assigned to the hospital where a plurality of his pa:ents were admi[ed. Thus, doctor who treats 40 pa:ents admi[ed to Hospital A, 30 admi[ed to hospital B, and 30 admi[ed to Hospital C, is assigned to Hospital A.

6 Fisher s rules for a[ribu:ng pa:ents are as logical as the Bacon game Elvis Presley appeared in Change of Habit (1969) with Ed Asner; Ed Asner appeared in JFK (1991) with Kevin Bacon; Therefore, Asner has a Kevin Bacon number of 1, and Presley has a Bacon number of 2. Wikipedia, h[p://en.wikipedia.org/wiki/six_degrees_of_kevin_bacon, accessed February 5, 2011.

7 Medpac s chairman introduced accountable arer Fisher s tes:mony Thank you Elliot. As always, a great job. [P 308].The third no:on that interests me is within such a framework of total cost and geography crea:ng opportuni:es for what I'll call accountable organiza:ons to get their own performance assessment. So if you have a geographic system the target would s:ll be the target for the geographic region. But as opposed to their payment consequences being based on the whole region's performance, it could be for a smaller subset like an extended hospital medical staff. [P 309] Statement of Glenn M. Hackbarth, Medpac mee:ng, November 9, 2006, h[p:// accessed February 5, 2011

8 A few minutes later, Fisher indicated his approval of Hackbarth s phrase I love your no:on of accountable organiza:ons. It's exactly the right thing we want to create. And I agree completely with applying it to all services. It should include the whole gamut of care so we get rid of the silos, because you look at the numbers of care transi:ons and you just see that these places are churning pa:ents from hospital to acute care to nursing home back to the hospital. Medpac mee:ng, November 9, 2006, h[p:// accessed February 5, 2011, P 311

9 HMO and ACO have very similar defini:on, purpose, and history Same diagnosis: FFS and fragmenta:on Same prescrip,on: Reverse fee for service incen:ves, shir insurance risk to doctors; protect pa:ents with report cards; consolidate clinics and hospitals into much larger en::es Shared poster child: Kaiser Permanente Same vague defini,on of HMO/ACO: network of providers held accountable for cost via capita:on and quality via report cards Each associated with one father (Ellwood; Fisher); Neither was demanded by pa:ents and doctors; each ini,ated by Congress and a few state legislatures

10 ACO proponents define the problem the way HMO proponents did In the following quotes from papers promo:ng HMOs (Ellwood et al.) and ACOs (Fisher and McClellan), note these similari:es in their diagnosis of the problem: * the fee for service payment method is the fundamental cause of health care infla:on; * the medical sector is fragmented.

11 Ellwood s defini:on of the problem, 1971 Medical care is presently provided by doctors, hospitals, clinics, visi:ng nurses, laboratories, and drug stores. It is the way health services are organized that needs changing. Health services are delivered by units that are both too small and too specialized. [ P 292] [Cont.]

12 (Ellwood s defini:on of the problem, 1971, cont.) The way that health care is financed today works against the consumer s interest. Since payment is based upon the number of physician contacts and hospital days used, the greater the number of contacts and days used, the greater the reward to the provider. [P 292] Paul M Ellwood, Jr., et al., Health maintenance strategy, Medical Care 1971;9:

13 Fisher et al s defini:on of the problem, 2009 To overcome the current system s perverse incen:ves and fragmenta:on, providers need to become accountable for the overall quality and cost of care for the popula:ons they serve. Elliot Fisher et al., Fostering accountable health care: Moving forward in Medicare, Health Affairs 2009;28:w , w220 (Published online 27 January 2009)

14 Fisher et al. s defini:on of the problem, 2010 The current system, based on volume and intensity, does not disincen:vize, but rather pays more for, overuse and fragmenta:on. Providers note that current payment systems undermine efforts to invest money and effort in delivery system improvements that can sustainably reduce costs. Mark McClellan et al., A na:onal strategy to put accountable care into prac:ce, Health Affairs 2010;29: , 982.

15 ACO proponents define their solu:ons the way HMO proponents did In the following quota:ons from Ellwood s 1971 paper, the Jackson Hole Group s 1992 paper, and McClellan Fisher s 2010 paper, note these similari:es in the papers descrip:on of the solu:on: * The HMO/ACO is vaguely defined (no par:cular organiza:onal structure is required); * the en:ty will be accountable for cost via capita:on and quality via report cards; and * the en:ty must provide all necessary medical services to a defined popula:on (aka enrollees ).

16 Ellwood s defini:on of the HMO Services would be purchased annually from Health Maintenance Contracts (capita:on). [ P 291][T]he HMO agrees to provide comprehensive health maintenance services to its enrollees in exchange for a fixed annual fee. The economic incen:ves of both the provider and the consumer are aligned. [P 295] Federal concern would focus on the performance of the HMO, not on its organiza:onal structure. [P 296]. A performance repor:ng system would be installed. [P 297] Paul M Ellwood, Jr., et al., Health maintenance strategy, Medical Care 1971;9:

17 Ellwood Enthoven Etheridge defini:on of accountable health partnerships The reformed system must be based on organiza:ons that integrate the financial, clinical, managerial and preven:ve aspects of health care, that are publicly accountable for their cost, health outcomes produced, and pa:ent sa:sfac:on. We refer to them as Accountable Health Partnerships. Such organiza:ons would replace the tradi:onal fee for service fragmented prac:ce model. [P 149] [Cont.]

18 (Ellwood et al. defini:on of AHP s con:nued) The cri:cal, defining characteris:cs of Accountable Health Partnerships will be their par:cipa:on in a system of public accountability repor:ng for the health of enrolled popula:ons and their ability to compete on the basis of costs. [They will] deliver the full array of Uniform Effec:ve Health Benefits. [P 153] [Cont.]

19 (Ellwood et al. defini:on of AHPs cont.) Registered [AHPs] can be single, ver:cally integrated organiza:ons consis:ng of providers who are capable of delivering health care services that meet the required set of Uniform Effec:ve Health Benefits, and insurers who are able to meet the underwri:ng standards for the industry. Registered [AHPs] may also be made up of two affiliated organiza:ons a provider and a carrier. [P 154] Paul M. Ellwood et al., The Jackson Hole ini:a:ves for a Twenty First Century American health care system, Health Economics 1992;1:

20 Fisher McClellan defini:on of ACO ACOs consist of providers who are jointly held accountable for achieving measured quality improvements and reduc:ons in the rate of spending growth. ACOs should have at least limited accountability for achieving these improvements while caring for a defined popula:on of pa:ents. [P 983] [Cont.]

21 (Fisher McClellan defini:on of ACO, cont.) ACOs may involve a variety of provider configura:ons, ranging from integrated delivery systems and primary care medical groups to hospital based systems and virtual networks of physicians such as independent prac:ce associa:ons. All accountable care organiza:ons should have a strong base of primary care. Hospitals should be encouraged to par:cipate. [P. 983] Mark McClellan et al., A na:onal strategy to put accountable care into prac:ce, Health Affairs 2010;29:

22 Defini:on of ACO according to Pa:ent Protec:on and Affordable Care Act The basic statutory requirements of the program are that ACOs need to have the capacity to deliver or arrange for the con:nuum of care for those patents assigned to it, to have a sufficient number of primary care professionals to provide services to at least 5,000 beneficiaries, and to report data on cost, quality, and overall pa:ent experience for beneficiaries in tradi:onal Medicare. [P 722] [Cont.]

23 (PPACA s defini:on of ACO cont.) Although Sec:ons 3022 and give the [HHS] Secretary discre:on in using addi:onal payment approaches, they specify a shared savings payment approach whereby groups would be paid their usual Medicare fee for service reimbursements, with no penal:es for higher spending, and could share in savings if the group provides care to assigned beneficiaries for less than a Medicare benchmark spending target while passing thresholds for quality of care. [P 722] [Cont.]

24 (PPACA s defini:on of ACO cont.) [T]here can be no limita:on on pa:ent choice of provider at the point of service. It is even possible that the Secretary could assign beneficiaries invisibly (without their knowledge) to an ACO on the basis of concurrent fee for service claims that indicate where they receive the preponderance of their primary care services, as was done in the Medicare Physician Group Prac:ce demonstra:on. [I]t is possible that the ACO wouldn t know which of its pa:ents qualify it for shared savings payments. [P 722] Robert A. Berenson, Shared savings program for Accountable Care organiza:ons: A bridge to nowhere? American Journal of Managed Care, 2010; 16:

25 Under Sec:on 3022 of PPACA, all sorts of groups can form ACOs [T]he following groups of providers of services and suppliers which have established a mechanism for shared governance are eligible to par:cipate as ACOs under the program under this sec:on: (A) ACO professionals in group prac:ce arrangements. (B) Networks of individual prac:ces of ACO professionals. (C) Partnerships or joint venture arrangements between hospitals and ACO professionals. (D) Hospitals employing ACO professionals. (E) Such other groups of providers of services and suppliers as the Secretary determines appropriate.

26 Invisible enrollment not possible for 40 percent of non elderly However, recent analysis of VHCURES data for the Health Care Reform Commission in Vermont has iden:fied a major issue when this approach is taken with a younger popula:on. That analysis found that approximately 40 percent of covered individuals do not have any contact with a primary care physician in a one year period. If this finding is accurate, it raises the ques:on of how to a[ribute those individuals. Further, if those individuals are not a[ributed and seek care, who will be financially responsible? How should their claims experience (if any) be used in calcula:on of premiums? William Hsiao et al., Act 128 Health System Reform Design: Achieving Affordable Universal Health Care in Vermont, P 108, h[p:// accessed February 5, 2011.

27 Summary of HMO ACO proponents thought process FFS system is the problem, ergo, capita,on (shiring insurance risk) is the solu:on. But cannot shir risk to small clinics and hospitals, so it becomes necessary to jus:fy consolida,on (which in turn requires cri:cizing fragmenta:on ). Cannot shir risk if pa:ents can seek care outside their HMO, so limited choice becomes essen:al. Shiring risk creates incen:ve to deny care, which jus:fies report cards.

28 Other consequences of HMO ACO premises To jus:fy capita:on (shiring insurance risk), it helps to claim capita:on will induce doctors to do more preven,on and disease management. To jus:fy all of the above capita:on, consolida:on, loss of choice, and report cards it helps to trash doctors (they refuse to do preven:on, they order services pa:ents don t need, they won t follow guidelines, they refuse to buy electronic medical records, etc.).

29 (Other consequences of HMO ACO premises cont.) If report cards are necessary, then guidelines with which to measure quality become essen:al, risk adjustment of grades becomes necessary which in turn jus:fies rou:ne collec,on of medical records, which in turn jus:fies universal and interoperable electronic medical records.

30 (Other consequences of HMO ACO premises cont.) If capita:on/premium payments to groups of providers is necessary, then risk adjustment of those payments becomes necessary, which (like report cards) jus:fies rou:ne collec,on of medical records which in turn jus:fies Universal adop:on of interoperable electronic medical records.

31 Capita:on without risk adjustment shirs resources from poor to wealthy From 2002 to 2010, about 75% of [the province of Ontario s] 13 million residents and 10,000 primary care physicians joined medical home models. The single most notable change was to switch from predominantly fee for service to predominantly capita:on prac:ces. Par:es involved in the nego:a:ons could not agree on case mix or socioeconomic adjustments ( capita:on payments were adjusted for age and sex alone). [P 2186]

32 (Capita:on w/o risk adjustment cont.) Without finer case mix adjustment, prac:ces in the healthier and wealthier areas obtained a[rac:ve revenue projec:ons with capita:on, and the majority chose this model. Conversely, physicians trea:ng sicker pa:ents had no incen:ve to join a capita:on model. Such adverse risk selec:on and cherry picking was accentuated because capitated medical homes were allowed to de roster pa:ents who sought outside primary care. This provided a strong incen:ve for some medical homes to drop precisely those pa:ents with higher health needs and complex care [P 2186). Major ci:es with urban poor and recent immigrants were much less likely to be served by primary care physicians working in a capitated medical home. [P 2187] Richard H. Glazier and Ronald Redelmeier, Building the pa:ent centered medical home in Ontario, Journal of the American Medical AssociaEon 2010;

33 Report cards without risk adjustment also shir resources We simulated performance based payments to Massachuse[s prac:ces serving higher and lower shares of pa:ents from these vulnerable communi:es in Massachuse[s. [P 925] We did not adjust for most poten:al confounders. [P 926] Typical prac:ces serving higher shares of vulnerable popula:ons would receive less per prac:ce compared to others, by es:mated amounts of more than $7,000. [P 925] Mark Freidberg et al., Paying for performance in primary care: Poten:al impact on prac:ces and dispari:es, Health Affairs 2010;29: , 926.

34 Most important differences between the HMO and the ACO may be Size (ACOs could be much smaller); insurance risk (will be shired to ACO doctors and hospitals in increments); and limita:on on pa:ent choice of provider (ACO membership will be a[ributed, enrollees will not be no:fied of their a[ribu:on to an ACO, and they will not have to stay within the ACO network).

35 CBO es:mated ACOs would cut Medicare spending by 1/10 th of a % Under this op:on [37], groups of providers mee:ng certain qualifica:ons would have the opportunity to par:cipate in Medicare as bonus eligible organiza:ons (BEOs). The concept of BEOs is similar to the accountable care organiza:on models proposed by some researchers. Congressional Budget Office, Budget OpEons: Volume 1, Health Care, December 2008, h[p:// The CBO es:mated this op:on would cut Medicare spending by $5.3 billion over the period. According to the Na:onal Health Expenditure Accounts, Medicare will spend $6.8 trillion over this period (Na:onal Health Expenditure Projec:ons , CMS, Table 2 h[p:// NHEProjec:ons2009to2019.pdf). Under the CBO s Op:on 38, primary care doctors would be paid by par:al capita:on. But CBO s savings es:mate for this op:on is virtually iden:cal to its es:mate for Op:on 37 $5.2 billion over the period.

36 Three ways to assess ability of ACOs to cut costs or improve quality Examine research on HMOs; Examine results of Physician Group Prac:ce demonstra:on; Examine research on tools ACOs are expected to use, including: preven:on and disease management coordina:on report cards and P4P schemes electronic medical records

37 HMOs damaged quality Number of comparisons HMO care was be[er than FFS care 4 HMO and FFS care were equivalent 19 HMO care was worse than FFS care 21 Total number of comparisons 44 Source: Kip Sullivan, Managed care plan performance since 1980: Another look at two literature reviews, American Journal of Public Health 1999;89:

38 HMOs increased consolida:on We find that higher levels of local managed care penetra:on are associated with substan:al increases in consolida:on in hospital and physician markets. In the average market between 1981 and 1994 [t]his is equivalent to moving from 10.4 equal sized hospitals to 6.5. In the physician market, [t]his implies a decrease in the percentage of doctors in solo prac:ce from 38 percent in 1986 to 24 percent by David Dranove et al., Is managed care leading to consolida:on in health care markets? Health Services Research 2002;37;

39 Prospect of ACOs is causing another round of consolida:on When Congress passed the health care law, it envisioned doctors and hospitals joining forces, coordina:ng care and holding down costs. Now, eight months into the new law there is a growing frenzy of mergers involving hospitals, clinics and doctor groups... [P A1] If accountable care organiza,ons end up s:fling rather than unleashing compe::on, said Jon Leibowitz, the chairman of the [FTC], we will have let one of the great opportuni:es for health care reform slip away. [P A27] Robert Pear, As health law spurs mergers, risks are seen, New York Times, November 21, 2010, A1.

40 Experts agree HMO experiment failed Events of the past year demonstrate beyond a doubt that managed care has failed and failed dismally. The greatest single ethical crisis facing American health care as we move into new year is what to do about it. Art Caplan, director of the Center for Bioethics at the University of Pennsylvania ("In 2001, managed care our No. 1 health crisis," MSNBC, December 21, accessed December 23, 2001).

41 (Expert opinion on managed care, cont.) Managed care is basically over. People hate it, and it's no longer controlling costs. Health-care inflation is now back in the double digits. So if it's not saving money, then why should we have it? But like an unembalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take awhile. George Lundberg, former editor of JAMA who as recently as 1996 had co-authored an article defending managed care (Linda Marsa, Former JAMA editor laments the state of medical care, Los Angeles Times, March 26, 2001, 26/t html, accessed March 28, 2001).

42 McClellan and Fisher view the PGP demo as an ACO prototype The ACO model builds on similar ini:a:ves that Medicare has implemented in the past several years. Star:ng in 2005, the Physician Group Prac:ce Demonstra:on engaged ten provider organiza:ons and physician networks, ranging from freestanding physician group prac:ces to integrated delivery systems, in a shared savings reform. The providers in the demonstra:on con:nue to receive all of their usual fee forservice payments. Mark McClellan et al., A na:onal strategy to put accountable care into prac:ce, Health Affairs 2010;29: ,

43 But the PGP demo failed to cut costs [T]he model for the ACO program has been tested in the PGP demonstra:on project that began in In the demonstra:on, 10 group prac:ces were permi[ed to receive bonus payments if they passed quality of care thresholds and achieved savings. [T[he year 2 evalua:on report documented that the essen:al reason for the overall savings across the 10 sites of about 1% was from diagnosis coding changes the PGP sites ini:ated. Robert A. Berenson, Shared savings program for Accountable Care organiza:ons: A bridge to nowhere? American Journal of Managed Care, 2010; 16: , 723.

44 Third test of ACO: Do these methods Preven:on ACOs might use cut costs? Disease management Coordina:on (gate keeping, u:liza:on review) Report cards and P4P Electronic medical records If ACO proponents have other mechanisms in mind, what are they?

45 Preven:on doesn t cut costs Although some preven:ve services do save money, the vast majority reviewed in the health economics literature do not. Joshua T. Cohen et al., Does preven:ve care save money? Health economics and the presiden:al candidates, New England Journal of Medicine 2008;358: It s a nice thing to think, and it seems like it should be true, but I don t know of any evidence that preven:ve care actually saves money. Jonathan Gruber, economist at the Massachuse[s Ins:tute of Technology, quoted in David Leonhardt, Free lunch on health? Think again, New York Times, August 8, 2007, C 2.

46 Cardiovascular preven:on raises costs The cost of caring for CVD, diabetes, and CHD over the coming 30 years will be on the order of $9.5 trillion. If all the recommended preven:on ac:vi:es were applied with 100% success, total medical costs [would rise] by $7.6 trillion (162%). Richard Kahn et al., The impact of preven:on on reducing the burden of cardiovascular disease, CirculaEon 2008;118: , 580.

47 Diabetes disease management raises costs by 25% Even for the most op:mis:c picture a 30 year horizon and assuming no turnover [pa:ents stay with the same plan for 30 years] the net effect on diabetes related costs would be an increase of about 25%. [P 261] The [disease management] program used in [this] study may be too expensive for health plans or a na:onal program to implement. [P 251] David M. Eddy et al., Clinical outcomes and cost effec:veness of strategies for managing people at high risk for diabetes, Annals of Internal Medicine 2005;143:

48 Disease management doesn t cut costs On the basis of its examina:on of peer reviewed studies of disease management programs, CBO finds that to date there is insufficient evidence to conclude that disease management programs can generally reduce the overall cost of health care services. Congressional Budget Office, An Analysis of the Literature on Disease Management Programs, October 13, 2004, h[p:// accessed September 25, 2005.

49 (Disease management cont.) [T]he results of our review suggest that, to date, support for popula:on based disease management is more an ar:cle of faith than a reasoned conclusion grounded on well researched facts.... Most of the evidence on disease management programs to date is derived from small high intensity programs focusing on high risk pa:ents that are typically run as part of a demonstra:on project by the providers at a single site. This evidence suggests that those programs typically lead to be[er processes of care, but the evidence for improved long term health outcomes and cost savings is inconclusive.... [T]he vendor run assessments typically do not meet the requirements of peer reviewed research... Soeren Ma[ke et al., "Evidence for the effect of disease management: Is $1 billion a year a good investment?" American Journal of Managed Care 2007;13:

50 Coordina:on doesn t cut costs To study whether care coordina:on improves the quality of care and reduces Medicare expenditures, the Balanced Budget Act of 1997 mandated that the Secretary of Health and Human Services conduct and evaluate care coordina:on programs. [p. 604] None of the [15] programs reduced regular Medicare expenditures, even without the fees paid to the care coordina:on programs. Only two programs had a significant difference in expenditures and, in both of these programs, the treatment group [that is, the group gejng coordinated care ] had higher expenditures. (p. 611) Deborah Peikes et al., Effects of care coordina:on on hospitaliza:on, quality of care, and health care expenditures among Medicare beneficiaries: 15 randomized trials, Journal of the American Medical AssociaEon 2009;201:

51 U:liza:on review doesn t cut costs Although u:liza:on review is widely used to control health care costs, its effect on pa[erns of health care is uncertain.we compared the health services provided to 3702 enrollees whose requests were subjected to u:liza:on review (the review group) with the services provided to 3743 enrollees whose requests received sham review and were automa:cally approved for insurance coverage (the non review group). During the study period, the mean age adjusted insurance payments per person were $7,355 in the review group and $6,858 in the non review group (P = 0.06). Stephen N. Rosenberg et al., Effect of u:liza:on review in a fee for service health insurance plan, New England Journal of Medicine 1995;333: , 1326.

52 Report cards do not improve quality [O]ur results show that report cards [on heart surgeons] led to increased expenditures for both healthy and sick pa:ents, marginal health benefits for healthy pa:ents, and major adverse health consequences for sicker pa:ents. Thus, we conclude that report cards reduced our measure of welfare over the :me period of our study (P 577). [M]andatory repor:ng mechanisms inevitably give providers the incen:ve to decline to treat more difficult and complicated pa:ents (P 581). [M]ore severely ill pa:ents experienced drama:cally worsened health outcomes. (p. 583) Report cards led to a decline in the illness severity of pa:ents receiving CABG [coronary artery bypass grars] in New York rela:ve to pa:ents in states without report cards. (P 583) David Dranove et al., Is more informa:on be[er? The effects of report cards on health care providers, Journal of PoliEcal Economy 2003;111:

53 Report cards can harm minority pa:ents Rachel M. Werner and David A. Asch (2005) find that the incidence of cardiac surgery for minority pa:ents rela:ve to white pa:ents declined in New York subsequent to the introduc:on of report cards. David Dranove and Ginger Zhe Jin Quality disclosure and cer:fica:on: Theory and prac:ce, Journal of Economic Literature 2010;48: , 955.

54 P4P does not improve quality There has been enough experience to date with pay for performance and transparency to argue convincingly that neither of these addi:onal mechanisms for compensa:ng physicians will achieve the goal of most pa:ents to receive high quality, humane, and affordable care. [cita:ons omi[ed]. These mechanisms are not silver bullets; they can enhance performance only modestly. In addi:on, these mechanisms may have unintended consequences.. If only a few measures are used in pay for performance arrangements, clinicians will design par:cular aspects of their prac:ce to ensure those measures are achieved, even if it means reducing quality of care in other prac:ce areas. Robert Brook, Physician compensa:on, cost, and quality, Journal of the American Medical AssociaEon 2010, 304;

55 P4P does not improve quality of hypertension care Explicit financial incen:ves in the pay forperformance ini:a:ve introduced in the United Kingdom in 2004 did not improve the quality of care and clinical outcomes for pa:ents with hypertension in primary care. Brian Serumaga et al., Effect of pay for performance on the management and outcomes of hypertension in the United Kingdom: Interrupted :me series study, BriEsh Medical Journal 2011;342:d108.

56 Electronic medical records and clinical decision support don t improve quality We analyzed physician survey data on 255,402 ambulatory pa:ent visits. [P E1]. [N]either EHRs [electronic health records] nor CDS [clinical decision support] was associated with ambulatory care quality, which was subop:mal for many indicators. We noted no associa,on between EHR use and care quality for 19 indicators and a posi:ve rela:onship for only one indicator. We also found CDS use associated with be[er quality for only one of 20 quality indicators, refu:ng our hypothesis that CDS would be associated with improved care quality. [P E4] Max J. Romano and Randall S. Stafford, Electronic health records and clinical decision support systems: Impact on na:onal ambulatory care quality, Archives of Internal Medicine, published online January 24, 2011, doi: /archinternmed

57 EMRs don t cut costs We linked data from an annual survey of computeriza:on at approximately 4000 hospitals for the period from 2003 to 2007 with administra:ve cost data from Medicare Cost Reports and cost and quality data from the 2008 Dartmouth Health Atlas. We calculated an overall computeriza:on score and three subscores based on 24 individual computer applica:ons. We analyzed whether more computerized hospitals had lower costs of care or administra:on, or be[er quality. As currently implemented, hospital compu:ng might modestly improve process measures of quality but does not reduce administra:ve or overall costs. David U. Himmelstein et al., Hospital compu:ng and the costs and quality of care: A na:onal study, American Journal of Medicine 2010;123:40 46, 40.

58 Why don t these managed care tools work? HMOs didn t work because administra:ve costs offset reduced medical costs, and for reasons set forth below. Report cards and P4P don t work because quality can t be measured accurately, and Skinnerian tac:cs work only with simple tasks. Cost of preven:on, DM and EMRs outweighs foregone medical expenditures due to be[er health.

59 Most important reason may be too few docs/nurses to meet all guidelines On the basis of recommenda:ons from na:onal clinical care guidelines for preven:ve services and chronic disease management, and including the :me needed for acute concerns, sufficiently addressing the needs of a standard pa:ent panel of 2,500 would require 21.7 hours per day. Kimberly S Yarnall et al., Family physicians as team leaders: :me to share the care, Preven:ng Chronic Disease (2), h[p:// accessed June 1, 2010.

60 Examples of ques:ons required by guidelines Are you feeling down? Have you recently traveled to another country? Do you have more than one sexual partner? Does your child live in or regularly visit a house built before 1950? How do you deal with anger? Any trouble sleeping? Do you wear a seat belt? Do you drink alcohol? Does your vision make it difficult for you to recognize your pills or read medica:on labels? Do you have a gun at home? Kathleen P Tomaselli, One more thing, American Medical News, January 23, 2006, 19.

61 So if ACOs can t improve quality or cut preven:on, disease management, coordina:on, costs with report cards and pay for performance, and Electronic medical records what mechanism do ACO proponents think ACOs will use?

62 Some ACO proponents cite medical homes Not clear why. Some claim homes will be building blocks for ACOs. Others imply homes have already shown an ability to do that which HMOs and managed care could not, namely, lower costs by improving care. But medical homes are almost as vaguely defined as ACOs, and have roughly the same track record, namely, none at all.

63 Example of ACO proponents invoking medical homes Reforms that support primary care can leverage accountable care, and vice versa. For example, medical homes typically involve addi:onal payments to primary care physicians each month in exchange for physicians leading preven:on, disease management, and care coordina:on ac:vi:es. Implemen:ng a medical home and accountable care organiza:on at the same :me could address budgetary concerns while also providing more incen:ves for overall care coordina:on. Mark McClellan et al., A na:onal strategy to put accountable care into prac:ce, Health Affairs 2010;29: , 985

64 Adding primary care workers to clinic staff doesn t require ACOs Research on home like en::es suggests that integra:ng more nurses and social workers into primary care clinics improves health, possibly enough to offset the cost of the addi:onal staff. But this simple interven:on does not require recycling the HMO experiment.

65 If FFS is the problem, why is underuse far worse than overuse? [W]e found greater problems with underuse (46.3 percent of par:cipants did not receive recommended care ) than with overuse (11.3 percent of par:cipants received care that was not recommended and was poten:ally harmful ). Elizabeth A. McGlynn et al., The quality of health care delivered to adults in the United States, New England Journal of Medicine 2003;348: , 2641.

66 ACOs won t work for same reason HMOs didn t work: wrong premises Wrong diagnosis (FFS); Faith based solu:ons that raise costs as much as or more than they lower costs: capita:on, which in turn requires consolida:on report cards and limited choice (or invisible enrollment )

67 One last ques:on: How are ACOs supposed to work outside Medicare? If insurance companies agree to shir risk to clinics and hospitals, who needs insurance companies?