Unattractive option?

Physicians rebuff Medicare’s new accountable care organizations

DOs cite program’s financial risks, administrative burdens: “Physicians are not going to go for this.”

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Test groups are unhappy

The CMS rule is partly based on the agency’s experience with an ACO experiment that ran from 2005 to 2010. Ten physician groups participated in the Physician Group Practice Demonstration, including Danville, Pa.-based Geisinger Health System and the University of Michigan Medical School in Ann Arbor.

Unlike meeting 65 quality measures under the proposed rule, participants needed to meet only 32 quality metrics. They faced no financial risks, but earned bonuses when they reduced costs and satisfied the quality standards.

In the pilot program, only six of the 10 groups received bonuses. That result fuels critics of the current proposal, which doubles the number of quality performance criteria in the demonstration project.

Moreover, executives from all 10 health care systems indicated to CMS that, while they support the concept of ACOs, they will not participate in the program as proposed. Among their reasons were the “large number of quality measures” and the fact that the program’s “downside [financial] risk is compounded by significant investment cost on the part of the ACO.”

Disagreement on start-up costs

Eligibility requirements to participate in an ACO include having at least 5,000 Medicare patients. In addition, half of a network’s primary care members must make “meaningful use” of electronic health records by the start of the second year.

CMS estimates that each ACO will spend about $1.8 million in start-up costs, largely for the information technology needed to ensure data sharing among providers.

The American Hospital Association (AHA), however, pegs those costs well above government estimates. In a study released May 13, the AHA determined that start-up costs will range from $11.6 million to $26.1 million.

“CMS’ estimate falls short of the mark,” the AHA’s president and CEO, Rich Umbdenstock, said in a statement. “The shared savings rate with ACOs should be adjusted to reflect these costs in order to encourage and enable participation in this important program.”

Challenges for rural practices

If the financial risk of the CMS proposal is too great for some medical groups to shoulder, it could be even more of a challenge for rural physicians. Kevin de Regnier, DO, a family physician in Winterset, Iowa, doesn’t see how an ACO could work in a small town.

“We have four family physicians, a general internist, a pediatrician and a critical-access hospital—that’s it. Just speaking financially, I don’t think we could be an ACO and assume the type of risk that would entail,” Dr. de Regnier says.

For Kathryn A.S. Wilson, DO, a family physician Springboro, Ohio, discontent with the CMS rule extends beyond any financial risk-reward considerations.

“My biggest concern is as plain as day,” she says. “Once in an ACO, we are being financially rewarded for ‘cost containment.’ That sure smells like rationing to me. I know my fellow physicians can see this if they stopped long enough to consider it. It makes me sad when I consider that some people’s care will be not be based so much on their best interest but on the ACO’s bottom line.

“In the end, I think I will avoid participating in an ACO until somebody twists my arm very hard for a very long time.”

Public comments on the proposed ACO rule are due June 6. CMS plans to implement the ACO program Jan. 1, 2012.

5 comments

  1. Robert Gross DO

    While I agree that the start up process is daunting and the ‘ meaningful use ‘ aspect is cumbersome I think it is going to happen whether we like it or not. And on the comment that this seems like rationing, I will have to assume that the comment comes from a physician that doesn’t currently deal with a lot of managed care. Their ‘ rationing ‘ I assure you, is much more draconian than anything CMS is likely to implement. Health Care reform for all of it’s flaws, may ultimately loosen the stranglehold of the for profit insurance and hospital industries on our health care system, if and only if physicians take the leadership role in it’s implementation. If there are flaws in the ACO program, then help to fix them. Your livelihood may depend upon it.

  2. Dr Z

    I disagree with Dr Gross comments. The current Health Care reform legislation in its present form will ultimately end up driving all private insurance and many private hospital systems out of business and result in government run socialized medicine with a single payor system, the Government. The slated massive cuts in Medicare and Medicaid budgets, compounded by the severe economic crisis we are facing, will soon force progressively more severe and harsh cuts in physician and hospital payments resulting in ‘rationing of care’ which will make the Managed Care system’s ‘rationing’ pale in comparison. The government is attempting to implement total control over the entire health care system so that physician’s and health care organizations will be forced to limit care based on financial rather than patient care considerations.
    I agree that we have to reign in health care costs, but we need to repeal the current Health Care reform, not take a leadership role in its implementation! Oh, by the way, I am a physician who deals with a lot of ‘Managed Care’ and have done so for too many years. My father was an Osteopathic General Practice Physician, and I can remember the days when the only 2 people in the exam room were the patient and their physician. I don’t have all the answers on solving all the problems facing healthcare, but the current Health Care Reform is not the answer.

  3. Patrick Murphy, DO

    I DISAGREE WITH DR GROSS AND AGREE WITH DR Z, IT IS FATALISTIC ATTITUDES THAT IT IS COMING AND CAN’T BE STOPPED OR AVOIDED PLUS OPPORTUNISM BY SOME THAT BROUGHT US MANAGED CARE.SINCE MANAGED CARE TURNED OUT TO BE MORE EXPENSIVE THAN PRIOR INDEMITY INSURANCE (PERHAPS IN PART BY PUTTING 600,000 INSURANCE WORKERS INTO THE HEALTH INDUSTRY).
    THIS ARTICLE SHOWS THAT ACOS ARE NOT SUSTAINABLE EVEN IF THEY ARE THE RESULT OF THE “AFFORDABLE”ACT.THEY WILL NEED TO BE REPLACED EVENTUALLY BY SOMETHING PRACTICABLE.

  4. robert migliorino,d.o.

    I agree that these measures are Draconian.However,one could implement a method of monitoring. Over the years,I have seen too many violators,both public & professional.Until admins stop mandating how one will practice & physicians show some backbone in not acquiescing to every patient’s & admins demand ,the situation will persist.

  5. David Shepherd

    Almost all healthcare reforms seem to propegate and increase complexity in healthcare. ACOs are no different. When will someone propose an idea that strips away at least one layer of complexity and simplifies the process. Patient sees doctor and patient pays doctor directly: use insurance only for chronic disease and major illnesses. Similar to car insurance. Insurance doesn’t cover an oil change for your car. Allow doctors to do thier job managing chronic disease and educating patients about what metrics we need to hit to “control” a chronic disease. And, imagine if we trusted patients to take some responsibility for assuring that thier doctor was actually doing his/her job. Of course, a decrease in bureaucracy would mean loss of jobs (and expenses) and no politician is going to propose something like that.

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