Accountable for Costs but What About Quality?

Accountable care organizations (ACOs) and other coordinated care models present opportunities for improving quality as well as offering incentives that will drive lower-cost decision making among providers

Accountable care organizations (ACOs) and other coordinated care models present opportunities for improving quality while offering incentives that will drive lower-cost decision making among providers. But new findings suggest that such care models carry risk—as more healthcare groups join a network to coordinate care, it increases their leverage to raise prices as they stifle out smaller or independent competition.

“Well-integrated provider networks may promote coordinated care that improves the allocation of healthcare resources, but they are likely to undermine competitive pressures to keep prices down while maintaining lower quality,” wrote the study authors Katherine Baicker, of Harvard University, and Helen Levy, University of Michigan. “Coordinated systems may thus deliver the right care to the right patient at the right time, but at the wrong price.”

As consolidation gives way to larger organizations, costs could be reflected on consumers and bully smaller networks from competition. Avoiding the monopolization of larger health systems would require regulators to maintain stringent monitoring, and for them to continually evaluate the functioning of new models in both public and private insurance policies.

Members from Leavitt Partners, a health care intelligence business, say the accountable care model is nothing like the managed care of the 1990s. Where past efforts focused mostly on controlling costs, ACOs are structured to also invest in bettering the health of the population.

“Accountable care, though, is more than simply a change in how care is financed, but is a shift in how care is delivered; it is a care delivery arrangement. It expands the focus of risk bearers to include measured outcomes of quality, not just cost,” wrote the Leavitt Partner researchers. “The efforts that organizations take now to adopt accountable care, whether they achieve their intended results or not, will frame the future of the American health care system for the next generation.”

A similar study presented in The American Journal of Managed Care suggests that in order for ACOs to reach their full potential, they must find a way to balance all the stakeholders in a system. “The FFS [fee-for-service] reimbursement system which remains in place does not by itself incentivize individual providers to practice in congruence with an ACO’s policy of cooperation, task substitution, and evidence-based care,” suggest study authors Arthur P. Hayen, MSc, Michael J. van den Berg, PhD, Bert R. Meijboom, PhD, and Gert P. Westert, PhD. “An unbalanced treatment of market and firm organization in either policy, practice, or the public debate could therefore limit ACOs’ potential in successfully taking on clinical and financial accountability for patient outcomes.”

Full maturation of the coordinated care model, especially the ACO, will take all those in a health network to truly take accountability. Quality improvements will follow cost control efforts if health systems work under the integrity a coordinated care model aims to deliver.

Around the Web

Care Coordination May Lead to Less Competition, Higher Prices [Modern Healthcare]

The Accountable Care Paradigm: More than Just Managed Care 2.0 [Leavitt Partners]

Accountable Care Organizations: How to Dress for Success [AJMC]

Accountable Care Organizations: How to Dress for Success - See more at: http://www.ajmc.com/publications/issue/2013/2013-1-vol19-n6/Accountable-Care-Organizations-How-to-Dress-for-Success#sthash.pEIW0GgT.dpuf

Accountable Care Organizations: How to Dress for Success - See more at: http://www.ajmc.com/publications/issue/2013/2013-1-vol19-n6/Accountable-Care-Organizations-How-to-Dress-for-Success#sthash.pEIW0GgT.dpuf