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Dr. Don Berwick on ACO’s: From Volume to Value

By Donald Berwick, MD

Editors Note: Thanks to a tweet today via @AxSys_Health

CMS Administrator Don Berwick, M.D., explains ACO’s in plain language.

Hi, I’m Don Berwick, CMS administrator. Today’s a kind of red letter day, October 20th 2011. That’s the day in which we launch the Accountable Care Organization final rule and I just want to spend a minute describing this to you a bit.

This is one of the most exciting and important elements the Affordable Care Act. When we think about the goal of transforming American medicine into the kind of care that we all want for ourselves and our loved ones. American medicine is fragmented right now.

You get lost between the slats because we built the system that way, we pay for it that way, we train for it that way and institutions manage themselves separately. That’s not what patients need. That’s not what you want and I want. We want continuity and seamlessness and most of all we want to stay home and healthy instead of being in hospital beds or sick if we can avoid it.

We are trying now through all the policies in the Affordable Care Act to change the structures of incentive in support for the American health care system, so we can better support that seamless care. Right now in a fragmented payment system hospitals get rewarded, for example, for keeping their beds full. Doctors get rewarded for doing as much as they can. We’re, shifting that game. It now becomes not how much you do but how well you do, that determines the rewards you get and the support you get from us at CMS.

That’s really what doctors and nurses and hospitals want to do anyway. What’s the idea behind an Accountable Care Organization, is to set up a structure, in which doctors and hospitals and others can join together and take responsibility for a group of patients, Medicare beneficiaries, who are attributed to them.

We watch the beneficiaries, we watch where they get their care and if they get the majority of their care from a group of doctors who want to form an ACO then those patients are attributed to the ACO. They still can go anywhere they want, it’s still a Medicare fee for services to the patient lost no choices. But now that ACO conformance say we want to take responsibility for these people that come to us for care, as the ACO then begins to better coordinate care for those people building more cooperation, investing in care coordination, adopting electronic records, working in such a way that people can stay out of the hospital and stay healthy.

What will happen is cost will fall and quality will go up and now in the Accountable Care Organization world they can share in the savings. We split the savings with them. Medicare keeps some, some goes back to the providers of care We don’t want them skimping on care and so we watch quality very closely. The ACO rule has in it 33 measures of quality that we’re going to track really closely, and all of the normal functions of anti-trust regulations and others are watching for good behaviors.

I think the provider community will rise to that. In the ACO rule we’re offering a range of options about how you can get into this shared savings environment all the way from the track one of the rule in which you’re allowed to share savings but you don’t have any downside risk if costs go too high, way over to the pioneer program, offered now by the center for Medicare and Medicaid innovation which you can actually share more savings but take more risk if costs go too high. In all cases we’re protecting the beneficiary but watching care very, very closely to make sure that it’s improvements that’s generating the savings that we can now share.

There’s lots of interest in this all over the country. We’re going to see ACOs of many forms develop and I’m pretty excited about getting this rule into final form. I’ve got to thank, literally hundreds of your colleagues, people all over CMS, all over HHS indeed, and other government agencies have been getting together to help shape this rule to download and read the over 1200 comments we got to travel all over the United States getting feedback so that the final rule can be much better than the proposed rule as indeed it is.

I think we have a really exciting program on our hands. Many of you will be called upon to explain this rule to beneficiaries, to your friends and neighbors and your family. Now I’d like to make sure you have all the information you want about this. So log on to cms.gov/aco or find other ways to get information, inform yourselves and we’ll be reaching out with information to CMS employees so you can understand this wonderful, wonderful new program.

It’s part of the transition to the American health care system we want, which is really supporting care, to keep people healthy and which the whole structure of care shifts from volume to value from how much you do to how well the patient does and that’s what the ACO is intended to do. It’s a pretty exciting day. Thanks.

For the complete video and original transcript posted, click here.

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