Are ACOs merely repackaged HMOs?

During my college years, we loved the album Bat Out of Hell by Meat Loaf. We would wail along with Meat Loaf as he screamed out his passionate interpretation of Paradise by the Dashboard Lights. Another memorable song on that album was Two out of Three Ain’t Bad, which offers an important lesson to those of us interested in health care reform.

No, Meat Loaf was not a medical policy wonk who offered health care solutions via allegory in his ballads. It’s the song title that caught me as I read yet another article on accountable care organizations (ACOs). Take a look at this banal 3 word description.

Accountable Care Organization.

These new organizations have much more to do with accountability and organization than they do with care. In other words, Two Out of Three Ain’t Bad.

ACOs are another coercive mechanism to track and compare physicians using quality metrics that are far removed from true medical quality measurements. As practicing physicians understand, and government reformers don’t, defining and measuring medical quality isn’t counting beans in a bottle. They claim they can count what can’t be easily counted. Conversely, just because something can be easily counted, doesn’t mean it really counts.

Of course, the ACO concept is attractive – more accountability, lower costs and higher medical quality. This 3-legged stool can stand only if all 3 of these legs are sturdy. I’m skeptical.

These “partnerships” between hospitals/insurers and physician groups provide lump sum payments to doctors to care for a population of patients. If physicians spend less money on care than this sum, then they can retain the savings. This sounds quite reminiscent of the Health Maintenance Organization (HMO) era, where there was a conflict of interest that restricted patients’ medical care in order to save money. We recall how popular this model was for physicians and for our patients.

HMOs were soundly rejected. Are ACOs merely repackaged HMOs in new bottles?

Beware of any ACO that contains the word partnership, unless you consider a 95-5 split to be a partnership. A mouse captured in the talons of a raptor doesn’t feel that he and the bald eagle are partners.

For those who simply must know ACO details, I encourage you to peruse the 429 page proposal issued by the Center for Medicare & Medicaid Services (CMS) in March 2011. If any reader does so, kindly leave a comment below so we can arrange for an expeditious psychiatric referral for you.

Of course, ACOs are not really about quality, any more than pay-for-performance initiatives are. They are about cost control and reimbursement redistribution. Physicians sign up, not because we are smitten by ACOs promises, but because we don’t want to be excluded from the panels.

Will ACOs, in their ultimate form, be good for patients? This is unknown and unknowable at present. ACOs are swirling in the wind, and various constituencies are swatting at it. We don’t know what its final form will be or where it will land.

So, what’s the ACO score so far?

  1. ACOs will employ thousands of bean-counting bureaucrats, which will reduce unemployment.
  2. ACOs will help to control medical costs.
  3. ACOs will be championed by physicians throughout the country.

Which of the above statements are true?  Meditate on the words of Meat Loaf, a prophet in his generation. Two Out of Three Ain’t Bad.

Michael Kirsch is a gastroenterologist who blogs at MD Whistleblower.

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  • ACO Watch

    Dr Kirsch:

    Seen one ACO, you’ve seen one, no doubt. Yet it is quite naive to lump all HMOs into the ‘We recall how popular this model was..’ mode, which is to grossly misunderstand the DNA of the HMO. There was and remains today distinct differences (financial, clinical and otherwise) between Kaiser, Mayo and Geisinger, or group practice derived HMO delivery systems, vs. the ‘graft an IPA onto mainstream medicine’ so we can sign an HMO contract world, while practicing business as usual medicine. The later of which were primarily delivered unto Caesar as United, Aetna, Maxicare and a host of other Wall Street fueled, acquisition hungry for profit HMOs hit the street. Merely smearing an HMO label onto a fee for services practice medical community with an overworked and under paid MSO, is at best wishful thinking. The HMO market is by no means a homogeneous one.

    One more time we hear the victimization cry that pursuing accountable care is someone a bureaucratic boondoggle. Time will tell. Granted the track record is not good.

    Yet, if disorganized medicine could get it’s act together and deal responsibly with the Hippocratic oath, the default position of something being done would not fall to the Government and our flawed sausage making machine of legislating and regulatory implementation.

    I hear you, but can’t see an alternative to ‘accountable care’ nor the triple aim. After all, who can argue in favor of ‘unaccountable care’ aka business as usual. I think not.

  • civisisus

    Aside from perhaps temporarily exorcising his pathological dread of change, does anyone understand the point of any of Dr Kirsch’s cranky screeds? serious question.

  • Michael Kirsch

    To the first commenter, I fear no change, but favor one that takes us to a preferred destination. TO ACO Watch, appreciate your points and agree that reform essential and current incentives are misalligned. Nevertheless, as I stated, I am skeptical that the ACO juggernaut is a quality initiative. It’s a carrot and stick scenario, as I see it. The costs can be precisely tracked, but quality is not so easily measured, despite the exhortations of those who champion pay for performance and related initiatives.

  • Ashley Doran

    I was around for….let’s call it ACO v1. I think it failed because there was very little transparency between patients, providers and payors. It’s a new day. We have infinitely better data systems. They still aren’t perfect (hello 12,000 flavors of EMRs) – but it’s harder to hide data now or pick and choose. Furthermore, social media is out front in leveling the playing field and democratizing care delivery. Whatever the initials, the best alignments are going to be noticed and adopted. At least, I hope so.

  • Stephanie Frederick, RN, M.Ed.

    One new ACO that I’m aware of has decided to hire a nurse practitioner, with an RN and social worker to assist the 100+ chronic disease patients that are within a 150 physician caseload. I guess that’s how the “lower cost” of the 3 part equation will happen.

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