ACOs: The New Managed Care by Dr. Singh

Is accountable care an underhanded way by which the federal government is foisting managed care on more and more Medicare fee- for-service patients? It appears so. It is clear that what the leaders of the country had no gumption for is being expected out of physician groups and private organizations. Not only has all the cost and effort of creating infrastructure been passed onto the physicians, they will now be held to a new standard of practicing medicine and placed on financial risk, to boot.

It is true that wherever there is a challenge, there is an opportunity. But it seems that this opportunity came out of an oblique, veiled approach that has not been fully spelled out by the government. Nonetheless, there are redeeming features to creating ACOs. To my mind, these features are:

  • An opportunity for physicians to take a lead and greater self-reliance.
  • Creates objectivity in healthcare evaluation for patientand population.
  • Rewards the physicians who are compliant andpractice good medicine.
  • Reduces healthcare costs.
  • Create a bigger pool of profit for savvy physician groupsor practices; potentially, greater profits than fee-for-service medicare
  • Creates a new standard of healthcare in the US; including technology, data review, analysis and feedback, a patient- centered team-effort toward well-defined goals, and improve quality.
  • Vertical integration possible in medical groups.
  • The center of gravity may shift from insurance to the medical practice and provider.
  • Reduction of administration expenses and removing the middle-men.
  • Waiving of Stark law and anti-kickback statutes.
  • A new platform for physician groups to develop and grow with.

However, there are still significant limitations to the ACO model presently. Some of these limitations, in my opinion, are:

  • A loose network of physicians.
  • No emphasis on MRA over the next three years.
  • Cost and burden of infrastructure.
  • Corporatization of medicine.
  • A loose panel of patients.
  • Poor education of patients and physicians.
  • Financial risk on physicians while the government gets to reduce its losses and stands to gain if profits are made.
  • The new requirements will place a high demand on physicians and physician groups which have hitherto been the bailiwick of insurance companies.
  • Return on investment delayed for almost two years.
  • Sophisticated risk-sharing arrangements and contracting will be needed which is not allowed with latitude in the present ACO model.
  • State governments are not up to speed.
  • Compliance plan can no longer be protected under attorney-client privilege and is public information.

Be that as it may, Medicare as we know it is undergoing a radical transformation, and it is time for us to recognize that.

What are the ingredients necessary for a successful ACO? In my opinion, these are:

  • An advanced electronic medical records and health records system.
  • Advanced data storage, procurement, review and analysis capabilities.
  • Strong compliance.
  • A team-based approach among healthcare providers and personnel; such as a group practice which can integrate clinical care.
  • Customer service and patient-centered medicine has to be emphasized constantly.
  • Disease management, case management and utilization management have to be part and parcel of the healthcare model.
  • Claims management and review system and real-time assessment of expenses by PCPs, specialists, and facilities.
  • Controlling or providing ancillary services, e.g., rehab, DME, laboratory services, radiology, part B drugs, etc.
  • A managed care mentality toward optimum utilization of funds, evidence-based medicine, reduced overhead and incentivization of physicians toward a more cost-effective care.
  • Creating standard policies and procedures for the company and holding each employee and provider to a higher standard and enforcing in-depth training and compliance.
  • Use of concentric networks will make all of the above easier to manage.
  • Developing closer communication and relationships among physicians.

The old managed care model was based on fixed premiums and, sometimes, withholding of care to the sicker patients. The new managed care model with emphasis on MRA and Star-ratings rewards those who are willing to take good care of sicker patients, be compliant with documentation, and ensure that all encounters reach the plan. The ACO model, at least for the first three years, will work on a fixed premium by using the benchmark created by past experience of utilization. Thus, any success with ACOs will be achieved by reducing part B expenses especially with ancillary services and reducing part A expenses by practicing established managed care solutions like using urgent-care centers, good discharge planning, reducing readmits, curtailing the abuse of 23-hour observation, and creating special protocols for the sickest patients.

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