Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.
Why is that the case?
ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.
Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."
• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.
• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.
• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.
• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.
• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.
These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.
Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.