I know you have already heard this term “accountable care organization”; the latest buzz word in health care. The term is attributed to Elliott Fisher of Dartmouth and Mark McClellan, the former director of the Centers for Medicare & Medicaid Services (CMS), now at the Brookings Institution. Pulled from academic work directly into the health reform bill, Section 3022 of Public Law 111-148, describes ACOs as a delivery organization supporting “a shared savings program […] that promotes accountability for a patient population and coordinates items and services […] and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery. Groups of providers of services and suppliers may work together to manage and coordinate care.”
So how is this different from the medical home model and the capitation reimbursement model or what we already went through during the 1980 and early 1990s? That is a great question and I think a number of lawmakers and other health care influencers have it mixed up. Definitions do matter and confusion will only make things more difficult to implement.
Let’s break it down with a crib sheet version you can post on your wall:
Capitation = Flat payment made per member (patient) per month and requires members to stay within a defined network or group of health care providers. The model requires the coordination of a full spectrum of inpatient, outpatient, primary and specialty care services to keep medical costs within the contracted rate (profitable), with shared savings distributed among the service providers/suppliers and the insurer. Risk is assumed (with some adjustment based on patient comorbidities acknowledged through claims) by the provider.
ACO = Capitation but not captive patient population. Patients may move from one ACO to another or a non-ACO provider. Shared savings based on separately defined quality metrics (unique to ACO; not in capitation model).
Medical Home = Per click payment for care coordination of a defined patient population based on primary care providers coordinating specialty care. Shared savings are supplemental and may be based on quality metrics.
The distinctions here are significant. Models that discuss a single-specialty only could be a Medical Home model where specialty care is coordinated and outsourced. However, these models (I have heard discussion of a pediatrics ACO model for instance) seem to not meet the definition outlined above or monetarily make sense as the pediatricians would still need to contract with other specialists that are willing, qualified and able to treat their under 18 population. Likely, these entities will want in on the shared savings, or more importantly the ACO provider will want the others to have skin in the game to keep costs appropriate. Instead, a pediatrics Medical Home model does seem plausible and a defined patient demographic could augment the sustainability (and predictability) of the model.
Also of note, these terms are being applied by not only Medicare. Private insurance companies are beginning pilots in the models. Medicaid programs are likely to follow as states are looking for new ways to cut state expenditures. Thus, the definitions are again VERY important as we are not just in the proverbial “Kansas” of Medicare any longer.
Other than what I believe is the misuse of the terms, a notable change in our blast-from-the-past experiment is whether the non-captive patient population of the new ACO model will work. I am glad to have a court-side seat to witness the successes and failures of this go-around. And have already ordered my several year supply of kettle corn for munching through the commercials and a pair of ruby slippers when the experiment gets a little too trippy for my tastes.
“Today I made my first really adult decision. I decided to stay a kid a little while longer.”
