A New Concept in Healthcare?

Hello everyone:  I’ve been reading about the accountable care organization (ACO) with great interest, in particular a blog hosted by The Commonwealth Fund (www.commonwealthfund.org).

The ACO is a concept that encourages groups of physicians to work together as teams to promote better health outcomes and decreased costs.

This idea is exciting. Instead of paying for expensive clinical tests which may or may not be beneficial to a patient’s care, or for expensive treatment AFTER a patient has become severely ill, these organizations are paid to keep patients healthy. Not only is this obviously good for the patient, but it is also an opportunity to decrease healthcare costs by decreasing the need for  expensive diagnostic tests, treatment, and surgeries after a patient has developed a condition or complication that could possibly have been prevented.

There are several potential options for payment models discussed by Karen David of The Commonwealth Fund in her blog posting Coherent and Transparent Health Care Payment: Sending the Right Signals in the Marketplace. These include the global fee option, where organizations are paid one fixed fee for all care for a health condition, and bundled acute case rates, where certain procedures are paid for by one rate that covers surgeon’s fees, anesthesiologist’s fees, the hospital bill…and even for after care should complications arise after the surgery! Sound too good to be true? According to Karen Davis in this same post, Geisinger Health System in Pennsylvania already offers a global fee for several procedures performed there. Ms. Davis in her post states that she is proud to serve on the board of directors for Geisinger, and well she should be!  This is truly an exciting, and seemingly a common sense, approach to healthcare finance.

As with any major reforms of this size and scope, the ACO will need to overcome numerous challenges and obstacles if it is to be successfully adopted – but I will continue to watch with great interest!

For more interesting reading, go to www.commonwealthfund.org. There is a LinkedIn group (subgroup of Healthcare Executives Network) at http://linkd.in/dxFOli.  Go To LinkedIn Groups directory and search for Accountable Care Organizations to request membership to the group.

What do you think?

-Lynn

2 Responses

  1. You noted:

    “The ACO is a concept that encourages groups of physicians to work together as teams to promote better health outcomes and decreased costs.

    This idea is exciting. Instead of paying for expensive clinical tests which may or may not be beneficial to a patient’s care, or for expensive treatment AFTER a patient has become severely ill, these organizations are paid to keep patients healthy.”

    This sounds a lot like a concept that was new 25-30 years ago- the HMO- groups of physicians in practice together that focused on health maintenance, not disease (although of course they treated disease). Given our current health care climate, perhaps the ACO can succeed where HMOs failed. In the early 1980s, when HMOS were a new concept, DRGs were being implemented with flat payment for the principal diagnosis rather than a cost-based system. Doctors had to switch from the idea of “as long as you’re in here, lets run these tests” to “the hospital can only make money if we treat you and send you home within a certain time period.” HMOs required a cultural change in our thinking (we don’t like being told which physician we can see, or which hospital we can be admitted to) and I don’t think we were ready for that 25 years ago. With the continual rise in health care costs, perhaps it is an idea whose time has come.

    • Hi Donna: You’re absolutely right…this does sound strikingly like the managed care movement of the 80s and 90s in many ways. Hopefully the proponents of the ACO will learn from the lessons of the past and this model will stay focused on higher quality, more economical patient care.

      It is definitely something to keep an eye on!

      -Lynn

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