nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Tuesday, March 29, 2011

Accountable Care: Another Performance-Based Flop

Accountable Care Organizations (ACOs), the latest brain child to improve quality and lower cost, fail at both.

A short time back I wrote about a large scale study in Great Britain that looked at whether switching to a Pay For Performance (PFP) method of reimbursing health care would be an incentive for doctors and other providers to give better care in treating people with high blood pressure.

Economists are always trying to work incentives.  In this case it's simple:  your patients do better and you get paid; if they don't, you receive a bite out of your wallet.  The GB study looked at 500,000 patients over a six-year period:  three years before PFP, then three years after PFP.

PFP had no impact on how well blood pressure was controlled or whether the patients had complications of the disease.  Not a bad study, and a real kick in the rear for those who think quality can be engineered by dangling payment or not-payment as an incentive.

The study looked only at whether PFP had an impact on the quality of health care, not cost....the other Great Benefit that performance and outcome-based payment systems are supposed to bring about.

Now comes an analysis of cost in a similar setup, resulting from the PPACA (Patient Protection and Affordable Care Act)--i.e., the health care reform law, or Obamacare, take your pick.

The government selected a group of large, well-financed practice groups--Physician Group Practices, or PGPs)--to test the ACO concept (ones that could absorb a loss and still look OK).  The group practices were offered standard Medicare rates, plus the chance to earn more by meeting certain performance standards.  These extra payments were referred to as Shared Savings.

Writing in the New England Journal of Medicine (Mar 23), the authors looked at whether the selected groups were able to recover the initial investment in an ACO (~$1.7M on avg) over the first three years.

The answer was NO.
"The available data indicate that 8 of the 10 PGPs in the demonstration did not receive any shared savings payments in year 1. In the second year, 6 of the 10 practices did not receive such payments, and in the third year, half the participants were still not eligible for any shared savings to offset their initial investment. Given that the percentage of shared savings in the first 3 years was so low for experienced, integrated physician practices, it seems highly unlikely that newly established, independent practices would be able to average the necessary 20% return on their investment."
Both your clinics and mine, plus the insurance industry, are looking closely at moving toward such methods for improving health care quality and reducing cost.  Billions are being spent pushing the idea by thinktanks and the government.  The authors make a great point about testing assumptions FIRST, before adopting policy changes that implement them.
"For policymakers, the urge to do something must be tempered by the risk of disrupting the entire value-based–purchasing movement. We are concerned that physicians and providers may unwittingly undermine future value-based–purchasing efforts if the ACO model fails to live up to the high expectations that do not comport with the data."
This is another pernicious result of Health Care Reform, not unexpected under a major overhaul that was rushed through by incompetents to score an ideological victory.  See my Poison Pill series for more examples.

The politicians get re-elected, the government bureaucrats find more make-work for themselves, costs continue to climb, and care doesn't get any better.

What more could the sick and injured ask for?

Doc D

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