By Gregg A. Masters, MPH
I am regularly amused by some in the popular press as well as guerrilla social media theater (myself included in that bucket) by the continued doubt if not outright dismissal of ACOs as the central spine if not fulfillment DNA of ‘the new, new thing/imperative’, i.e., to manifest the ‘triple aim’ as the sustainable healthcare ecosystem.
In the last 24 hours I interacted with one of those credible voices following a heads-up to the blog post: ‘Smart Money, ACOs and Risk Savvy Medical Managers’, where I argue that ‘smart money’ is betting on (and walking the talk) of ACO implementation, to wit the following tweets were then exchanged (Note: Dan had sent me the ‘eye porn’ headline titled ‘Are ACOs Doomed to Fail’ which was in part the impetus for the smart money post). After reading the post Dan offers:
Dan Munro @danmunro: Solid points – but endorsements “aren’t the droids we’re looking for.” Think Tom Cruise and “SHOW ME THE MONEY!” 😉
Gregg Masters @2healthguru: @danmunro See: http://content.healthaffairs.org/content/31/9/2074.abstract… AND bit.ly/ShTka4 Huge impact. Only beginning. #ACOchat
Dan Munro @danmunro: @2healthguru … but the underlying payment mechanism is still FFS – and “shared savings” will vary widely & be small: hc4.us/ACOsFFS
Dan Munro @danmunro: @2healthguru It’s a debate we all need. I just feel like we’re still playing around the edges. Any form of capitation only goes so far.
Well I’m not sure what metric my friend used to judge something as ‘varied’ and ‘small’, but for those of us previously operationally tasked with managing bed day utilization, admit rates, and by definition readmission, consistent with quality measures, these are not small numbers reported by the collaboration between Aetna and NovaHealth, an independent physician association based in Portland, Maine:
The patient population in the pilot program had 50 percent fewer hospital days per 1,000 patients, 45 percent fewer admissions, and 56 percent fewer readmissions than statewide unmanaged Medicare populations.
You don’t have to be a math whiz to grasp the economic significance of 50%, 45% and 56% reductions in major indices of hospital utilization. Whether per case or per diem calculations we’re talking serious savings to the payor [Medicare, or the Medicare Advantage risk contractor]. Such impact via ACO pilots dwarf the soft savings assumptions embedded in the Medicare Shared Savings Program since most projections are leaning on the modest results produced to date via the Physician Group Practice Demonstration Project which notes:
in Program Year 2, the cost per Medicare beneficiary were reduced by only $120 (1.2 percent) as compared with the base year. Whereas the groups earning bonuses reduced expenditures an average of $334 per person in Program Year 2.
So to the Dan’s of the world, up your sights as to the possibilities here! It’s time to be the change we seek, and stop looking for reasons to fail, up to and including finding empirical reasons to manage to mediocrity vs. the achieve the win within the reach of like minded, passionate and collaborative people.
Editors note: I will be interviewing Charles Kennedy, MD, CEO of Aetna’s Accountable Care Solutions Group, on Wednesday, November 14th, 2012 at 3:30PM Pacific time, listen here.