The complications of health reform's accountable care organizations

A woman is examined by a doctor.

TEXT OF STORY

Kai Ryssdal: One of the basic ideas behind the health care reform law was to cut costs. One of the basic ways to do that, it turns out, is to coordinate patient care. Make sure that everybody a patient goes to see knows what everybody else that patient goes to sees is doing.

The reform law is trying to do that by bringing doctors and hospitals and insurance companies that handle Medicare patients into what are called accountable care organizations. Details of exactly how that's going to happen are still being worked out; we're expecting early rules sometime soon.

Nancy Marshall Genzer reports from the Marketplace Health Desk says just about everyone in the business of health care has something at stake.


Nancy Marshall Genzer: Think of health care, for a minute, like buying a car, says Harold Miller. He heads a health care think tank.

Harold Miller: Would you go to the engine store and buy an engine, and buy a transmission, and then somehow, figure yourself out how to put those things all together and actually have a car that would genuinely be safe to drive down the road at 60 miles an hour?

Uh, no. But Miller says that's exactly how our current health care system works.

I caught up with him recently at an American Medical Association conference. He says we buy the parts of our care and stitch them together. We shop around for specialists, who may or may not talk with our primary care doctors. We decide among surgical centers and hospitals for outpatient procedures. Miller says health care would work a lot better, especially for people with chronic conditions, if patients had a team of providers and hospitals who shared responsibility for their care. That's the idea behind an accountable care organization, or ACO.

Karen Ignagni is CEO of America's Health Insurance Plans, the main trade group for health insurers in Washington.

Karen Ignagni: That's the promise of what ACOs are supposed to achieve. More integrated, higher quality performance and thus lower costs.

Integrated as in, you see your primary care doctor, say, about your high blood pressure. She confers with a specialist, who is a member of the ACO. You're given medication. An ACO nurse reminds you to take it. Everybody's in touch with everybody; there's no expensive duplication of tests or conflicting treatments. You stay well. The accountable care organization keeps costs down, and is rewarded with a bonus.

Sounds simple. But it's not. Again, Karen Ignagni.

Ignagni: We are focusing in like a laser on the concern that this not be a recipe for more consolidation, higher costs and more cost-shifting.

Insurers are worried that doctors and hospitals in ACOs will get so big they can dictate prices and squeeze insurance companies. They want the new regulations to prevent that.

Doctors and hospitals are also worried about their financial interests. They want only basic standards for quality. So it's easy for them to earn bonuses. And they don't want to be held accountable for medical services a patient gets outside of the ACO.

Barak Richman: It's called accountable care organization for a reason.

Barak Richman is a health economist at Duke University. He says rewarding health care providers when they meet goals, and penalizing them when they don't, is the only way ACOs can do what they are supposed to do: improve care and save money.

Richman: If the rules are written in such a way that doctors are protected from the downside, then I'm very skeptical that we're going to see the kind of foundational change to the delivery system that we really need.

And keep in mind that the new rules are preliminary. After they're published, there'll be a public comment period, for recommendations for tweaks in the final rules. And everybody will have something to say.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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