ORLANDO—The rise of accountable care organizations (ACOs) continues to cause uncertainty in the medical field, but a group of experts gathered at the American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) Annual Meeting for a panel discussion to try to give guidance—and, if possible, soothe anxieties—about this aspect of the changing medical landscape.
Gavin Setzen, MD, secretary-treasurer of the AAO-HNS and president of the New York State Society of Otolaryngology, said that the quickly expanding number of ACOs make them entities that must be considered. There are more than 600 ACOs that include more than 14 million patients, and 20% of Medicare ACOs were created by academic medical centers. “And that’s likely going to continue to increase,” he said.
Although analyzing data properly is a costly undertaking that requires extensive infrastructure, the data is indispensable when it comes to participating in an ACO, he said. It’s essentially the heart and soul that drives decision-making. “Technology is going to enable successful participating,” he said.
The decision on whether to join comes down to a thorough, honest assessment, Dr. Setzen said. “If your practice considerations and environment are stable and you have good financials, a healthy IT platform, [and] excellent referral sources, [and if] ACOs are not a major threat in your community and your SWOT analysis says, ‘keep doing what you’re doing,’ [then] keep doing what you’re doing,” he said. “If those market factors and other forces are transitioning you towards an ACO, then that’s a consideration to take advantage of.”
Lisa Dillon, MD, MBA, senior medical director at Advocate Physician Partners, based in central Illinois, who has been running that ACO for three years, said that with the “shared savings” model, which requires more robust data analysis but returns lower income—a deal that is “very good for the payer”—it appears that “we’ve added a lot of cost for the ‘privilege’ of making less money.” Strange as that might seem, it makes sense, she said.
“We see shared savings as a transitional model,” she said. “Shared savings is a stepping stone to taking on capitation and prepaid contracts and then actually offering an insurance product…. This is where we think we’re going.”
She added that a lesson from manufacturing shows that it is possible to increase quality while decreasing cost, by cutting down on variation that doesn’t contribute to a product’s value. For example, if a surgeon or hospital more routinely performs according to what she called Episode A (fewer tests, hospital stays, and other expenses) and less often falls into Episodes B or C, with more expenses, including skilled nursing and home visits, then those surgeons and hospitals are used as models to follow.
Most of the cost-cutting attention is being paid to primary care, cardiology, orthopedic surgery, and other specialties, but it benefits otolaryngologists to begin adapting now. Those other specialties “are scrambling and reacting to this. But if we start participating now, we kind of have a quiet luxury of observing, learning, and proactively planning,” Dr. Dillon said. “When the spotlight comes around to us, we’ll be ready.”
— Lisa Dillon, MD, MBA
Subinoy Das, MD, director of the division of sinus and allergy at the Ohio State University College of Medicine in Columbus, said that the ACO approach to medical care presents ethical problems because it is designed to maximize care to an entire population, not just the individual patient. “We make a covenant to our patient,” Dr. Das said. “There is no command in the Hippocratic Oath for looking out for society or for a larger population.”
Patients who sit on the fringes of the bell curve and have less common illnesses might receive suboptimal care, he said. “That means we’re willing to accept letting some people who are in the minority drop off, or maybe have their health even get worse, if they don’t follow the guideline or they don’t follow the resource allocation that was really geared toward helping all these folks with high blood pressure or diabetes or chronic illnesses,” he said. “Most of our resources then get devoted to people with the most common problems.”
He also said that if it is unethical for a physician to have a financial incentive that might lead to unnecessary care, a potential problem under the fee-for-service model, then it is also unethical for primary care physicians to gain a financial advantage by reducing the amount of care that’s delivered.
He suggested that subscription-based healthcare should be a preferred alternative, that insurance should be high deductible and should extend across state lines to reduce administrative costs, and that individual policies should be tax deductible.
David Nielsen, MD, executive vice president and CEO of the AAO-HNS, said that there might be a lot of doomsday thinking when it comes to an ACO, but added, “There’s hope for us.”
“The idea that’s rampant is, ‘If I don’t sell my practice to a hospital and become an employed physician and work for a large health plan, I’m doomed. I can’t survive as a one-, two-, three-, four-person group,’” he said. “And that’s simply not true.”
He discussed numbers, in what he called an “oversimplified” example borrowed from the Center for Healthcare Quality and Payment Reform, showing that it is possible for physicians to increase their payment while, at the same time, hospitals decrease their payment but increase their profitability, with purchases and patients saving money in the end.
Whatever changes an otolaryngologist might make to his or her practice, new payment models are only useful “to us as physicians if they truly incentivize superior care and outcomes.”
“It isn’t just data, data, data, and more data,” he said. “It is outcomes data. We have to know what works.”
Rob Green, MD, president of ENT and Allergy Associates in White Plains, N.Y., expressed the unease many otolaryngologists are experiencing.
“As we consider what’s going on in the marketplace, my question for you is how do we advise those of us at this point in time who wish to maintain independence? … Many of us are sitting out there really not knowing what to do,” he said.
“Everybody should do what they can to look at outcomes data,” said Dr. Nielsen. When you have that data, the next time you contract with anyone, you are armed with information, he added. “Look for the little things you can do that will either improve resource use or increase outcomes that you can use as evidence, and get in the habit of using that evidence every time you talk to somebody to negotiate a process.”
The moderator of the session, K.J. Lee, MD, founder of Virginia-based Simplicity EMR and former president of AAO-HNS, said otolaryngologists should not feel the need to make any firm decisions about ACO participation just yet. “Pay attention to what an ACO is, but don’t jump into joining quite yet,” he said. “It’s bound to be changing, and ACOs are going to change into various different forms. And, since otolaryngology is such a small portion of the total healthcare budget, nobody’s paying attention to us. So, by the same token, we can just sit by the sideline, study it, and strategize from there.”
He added, “The light at the end of the tunnel is that there will be an alternative payment system in which you can take into consideration the volume of care that you render at the same time, [considering] how good a steward of the healthcare dollar you are—the so-called ‘hybrid’ payment system.”