Federal Policies and Initiatives - Health Informatics in the Cloud - page 14

Accountable Care Organizations
The idea of producing better results while spending less may seem counterintuitive
to some readers. However, it is a key assumption in most quality improvement
efforts and is well accepted in other industries, such as manufacturing, where doing
it right the first time, rather than inspecting for defects and fixing them after the fact,
has led to substantive improvements in product quality while driving down costs.
Healthcare, as always, is different. An example of this is found in a 2004 study
from Kaiser Permanente. [ 9 ] It looked at disease management programs for coro-
nary artery disease, heart failure, diabetes, and asthma in their organization and
found that ”we cannot reduce costs by improving quality unless the treatments and
educational interventions that we bring to the chronically ill are not merely recom-
mended by evidence-based guidelines but are cost-saving.”
To achieve cost savings we need new care models designed to reduce cost. Such
models do exist. The Robert Wood Johnson foundation advocates the Chronic Care
Model [ 10 ]. The American Academy of Pediatrics, the American Academy of
Family Physicians (and its Transformed subsidiary) and other groups advocate the
Patient Centered Medical Home (PCMH). [ 11 ] These are similar models that
emphasize a more coordinated and team-oriented approach to care that ultimately
requires health information technology to manage and orchestrate new processes.
They do seem to work, if done properly. A review article found that “18 of 27
studies of the Chronic Care model concerned with 3 examples of chronic conditions
(congestive heart failure, asthma, and diabetes) demonstrated reduced healthcare
costs or lower use of healthcare services.” [ 12 ]
The term “Accountable Care Organization” (ACO) was first used in 2006 by
Elliott Fisher, Director of the Center for Health Policy Research at Dartmouth
Medical School, during a discussion at a public meeting of the Medicare Payment
Advisory Commission. [ 13 ] Again, we will not delve into the details here but an
article from Health Affairs [ 14 ] provides a good overview. The basic idea is to
change the reimbursement model so that practitioners are rewarded for providing
care at or above well-defined levels of quality if they do this at a lower cost than
would otherwise be expected. Will this approach work?
ACOs are designed to help solve some of the basic deficiencies in our management
of chronic disease by incentivizing providers to adopt the new models for chronic
disease management. As we discussed earlier, one of the major problems is lack of
information sharing. Chronic disease drives the substantial majority of healthcare
costs. Given the fragmented nature of our health system chronic disease patients -
particularly those with multiple chronic diseases - receive care from many different
providers in the typical year. In this country, except in certain limited areas that do
have a health information exchange, each provider delivers care with little or no
knowledge of what the other providers have done.
But does this lack of data sharing actually create problems? The answer seems to
be yes. The 2008 Commonwealth Fund International Health Policy Survey of Sicker
Adults [ 15 ] was a telephone survey conducted from March to May 2008 of
prescreened adults whose health was fair or poor based on; serious illness in past