Change is afoot in health care and is assured now that the Supreme Court has upheld the Affordable Care Act. A critical component will be modifications in the way we are reimbursed for services, with the obituary of fee-for-service payments now written and published. Change is always challenging and frequently involves risks, so the question is how to realize change in the face of unknowns.
For much of my career as an academic physician, I was involved in developing, evaluating and implementing changes in surgical practice. At its core, we were replacing procedures requiring a large abdominal incision and extended recovery time with minimally invasive techniques done through endoscopes for outpatients. Surgery is inherently risky and testing new procedures doubly so. These risks were mitigated in several ways. First, and most importantly, we tested procedures in a no-risk environment using a variety of models. Only when techniques were perfected and safe were initial trials undertaken with well-informed patients. Second, we practiced as a team, including physicians, nurses and technicians. Everyone understood their role and what was expected before we graduated from the practice environment. Third, we all knew the ultimate goal – to accomplish the same surgical task, but with the reduced pain, recovery time and expense associated with a minimally invasive approach. The result of this work, here and nationally, has been to replace standard invasive procedures with endoscopic techniques that have dramatically reduced morbidity.
The transition to “accountable care” also entails some risks. Accountable care ties reimbursement of a medical team to clinical outcomes and the total cost of care. In this model, the delivery system has a budget to provide care for a defined patient population; a portion of the funds are withheld and returned only if certain quality outcomes are achieved. The principal risk to the delivery system is being unable to provide the necessary care with the allotted funds and having to absorb the excess expense with no additional revenue to cover the loss. Can we mitigate this risk? I believe so.
The Centers for Medicare and Medicaid Services (CMS) is encouraging teams of providers to form Accountable Care Organizations (ACOs) and apply for a three-year shared savings program for Medicare beneficiaries. At the beginning, the ACO will be given a budget target for the population of Medicare beneficiaries for whom the ACO is “accountable,” based on the prior year’s expenditures. If the annual rate of growth in cost for this population is less than the national average, savings are generated and ACO providers will share in these savings. Notably, if the target is not met, providers will receive the usual Medicare reimbursement for services—i.e., they are not taking a financial risk on the population.
This type of ACO allows the delivery system to practice being accountable for a population in a no-risk environment. To do well will require a focus on quality, keeping folks healthy, and developing an integrated system of care. We are applying to participate in the CMS shared savings program and have made the offer to other providers around Vermont to join us, so we can take the opportunity to practice as a team in developing the clinical and business relationships that will make us successful when we are held accountable for the care we deliver.
The ultimate goal is clear. We must provide access to high-quality care that is affordable, while remaining clinically and financially strong as an organization. I am confident we will achieve this goal, as we have time to practice as a team of providers all dedicated to serving our community. When we arrive in the operating room of accountable care, we will be ready.
John R. Brumsted, M.D. is the President and Chief Executive Officer of Fletcher Allen Health Care and Fletcher Allen Partners.