Accountable care organizations could be the best way to reduce the cost of managing patients with chronic conditions in a sustainable way. But in a talk at the ENGAGE conference in Bethesda, Maryland this week, Farzad Mostashari stressed that ACOs need to be good for patients, society and physicians or the model will fail.
Mostashari is the former director for the Office of National Coordinator and he has a financial interest in ACOs success. He started Aledade earlier this year to give physician-led ACOs the health IT tools and support they need to establish themselves and thrive. But he also raised some good points on why other attempts at healthcare reform have fallen short.
ACOs fulfill the idea of being good for doctors, patients and society because they reduce the cost of treating chronic disease in Medicare patients — a significant tax burden. Doctors receive financial incentives in exchange for improving the health of their patients. Win, win, win.
Mostashari highlighted an ACO success story in a recent New York Times Op-Ed article, there is one big ACO success story. In its first year, Rio Grande Valley ACO earned $12 million and saved CMS $20 million. It also significantly reduced patients D5 score for Type 2 diabetes. But there’s no way to know whether it will still be able to maintain those results a few years from now.
The complexities surrounding patient attribution for ACOs are one source of concern. Mostashari worries about providers creating a situation where [patient attribution] goes against patients.
“One thing I worry about is if we get greedy [people] doing stupid things — our capacity for that as human beings is large,” said Mostashari.
Another potential pitfall is failure isn’t enforced. Physicians and providers, afraid of getting left out, may use the ACO model as a way to gain access to competitors’ information that participating in an ACO can give them. If ACOs grow big enough to dominate the market, they may use their market power to command higher prices from patients.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Failing the doctors is another concern. “We can’t ‘utilization manage’ the patients anymore, so we utilization manage the doctors,” said Mostashari. “Doctors have to see what is good for them in this. We have to make it easier for them to succeed.”
Managed care was ultimately rejected in the 1990s because patients perceived that cost concerns were deemed a priority over the quality of their care. A proposed Medicare Physician Fee Schedule proposal in 2009 to increase primary care physician costs and reduce cardiologist salaries backfired, because the specialists balked and applied political pressure so their representatives were aware of their dissatisfaction.
“I argue that of we want to have healthcare reform that hits the triple shot, it has to be good for each group,” Mostashari said.
