What will 2012 hold for healthcare? Let’s ignore for now the inevitable political controversy and ideological teeth-grinding over health reform that will no doubt continue on both sides of the Atlantic.

If we focus instead on the payment and delivery system reforms that will preoccupy the health sector, then the concept of integrated care is likely to be somewhere near the top of the list (again).

Here, in the US, this means 2012 will be the year of the ACO – the accountable care organization - widely regarded as a cornerstone of the current reform agenda. The past 12 months have seen much activity and excitement around ACOs – similar to the frisson that talk of integrated care continues to create back in the UK.

Despite this, the ACO has been having a difficult time. Early drafts of the requirements to be made of participants in the official ACO program (the Medicare Shared Savings Program) resulted in outcry from providers – “too many measures, too few incentives” -  and the prospect of the project falling flat at the first hurdle. But today, with revised regulations published that effectively lower the bar for the formation of Medicare ACOs, and the recent development of the Pioneer ACO program - designed to further encourage organizations already operating in ACO-like arrangements - the game is back on.

Those involved in the development of the ACO program should be praised for the recent refinement of the regulations. The changes will at the least ensure a wider range of entities are provided with an opportunity to come together and take a first step toward improved integration. Similarly, re-drafted guidance from the FTC and DoJ, offering a more flexible approach to antitrust enforcement has been put on the table (though on closer reading, the relationship between competition and integration has not significantly altered - more of this in another blog).

Nevertheless, critics of the ACO concept suggest the new organizations will amount to little more than “HMOs in drag”, a simple variation of previously tested initiatives, and an idea that will barely get off the ground before being put back in the hangar.

So, heading into 2012, the big question is “Can ACOs deliver on their promise?”

With an optimist’s hat on, at the very least one can see the ACO agenda as a useful driver for moving key elements of the US system toward improved integration, and a stepping stone to further payment and delivery system reform that address some of the cost and quality issues so apparent here.

However, in the short- to medium-term, ACOs may suffer from the high expectations afforded them by their biggest supporters. Past experience in the US suggests that current enthusiasm for ACOs should be balanced with a dose of pragmatism.

The Physician Group Practice Demonstration [1] - what might be considered a precursor to the ACO model – was a centrally funded project that created incentives for physician groups to coordinate care delivered to Medicare patients, rewarding them for improving the quality and cost efficiency of care through greater collaboration. The demonstration ran for 5 years until 2010. Its evaluation revealed only very modest gains in quality (against set benchmarks) and equally small cost savings. [2] More worryingly, this muted outcome came despite the participants being considered good candidates for achieving the desired objectives when originally selected. 

Another effort, the Medicare Coordinated Care Demonstration, tested the effectiveness of care coordination interventions and disease management programs in a Medicare setting. After 4 years, only 2 of the 15 programs resulted in reduced hospital admissions, and none of the programs generated net savings [3].

The limited success of these demonstrations should perhaps act to dampen unreasonable expectations of the Medicare ACO program [4].

It’s also worth looking at the bigger financial picture. The Congressional Budget Office has projected that Medicare will save $5.3 billion over ten years from successful development of the ACO project [5]. However, during the same period, total Medicare spending is projected to be over $7 trillion [6]. The (projected) savings therefore amount to one tenth of one percent of Medicare expenditure over the next decade – little more than a ‘rounding error’ in the view of some!

Even architects of the Obama reforms have themselves raised such concerns. Zeke Emanuel – ex-White House health reform ‘fixer’ –  has argued that when you are spending $2.6tn a year on health care, reform initiatives that deliver less than savings of 1 percent of costs, i.e. $26bn a year, are “simply not meaningful”. Inferring such logic to the ACO program does not make for a comfortable conclusion.  

What might the NHS learn from all this?

As 2012 gets underway and integrated care likely receives a significant share of policymakers, regulators and commissioners attention, then this enthusiasm should be tempered with the mantra “Don’t expect too much, too soon”. Integrated care is not well suited to the immediacy of ‘Nicholson challenge’. (And on this point, what has happened to the NHS’ own integrated care pilots? [7]).

So, as well-intentioned, centrally-sponsored schemes for integrated care are discussed and developed, the question needs to be asked: “What else can we be doing?”

Whilst there will be many both in the US and UK working hard – commendably so - to deliver within a particular program or implement an endorsed model, others must be given the room to think outside the box and do things differently. It will be here that the game-changing breakthroughs are made.

References

  1. Secretary of Health and Human Services, Report to Congress: Physician Group Practice Demonstration (PGPD) Evaluation Report (2009); CMS PGPD Fact Sheet (July 2011); CMS PGPd Summary Results. All materials at https://www.cms.gov/demoprojectsevalrpts/md/itemdetail.asp?itemid=CMS1198992.
  2. PGP Report (2009), supra note 10, at 9; see also id. at 17
  3. http://www.mathematica-mpr.com/health/mccd.asp
  4. http://www.nejm.org/doi/full/10.1056/NEJMp1110185
  5. Congressional Budget Office, Budget Options Volume I: Health Care at 72-74 (Dec. 2008), available at http://www.cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf.
  6. 2011 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds at Table III.A1 (2011), available at https://www.cms.gov/reportstrustfunds/downloads/tr2011.pdf
  7. http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_121979

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