Medicare officials are ready to draft accountable care organization regulations, but legal, economic and organizational challenges remain
On the road last June to stump for health reform, President Barack Obama argued for an overhaul without which, he said, paychecks, jobs and the economy would suffer. Too many lack health benefits and too few insured can afford care, he told a Wisconsin crowd. He lobbied for changes to squeeze spending for care that shows no results. “ We have the most expensive healthcare system in the world, bar none,” he said. “But here’s the thing, Green Bay: We’re not any healthier for it.”
And he singled out pay to hospitals and doctors—not the price, but the method—as a major culprit behind waste.
“We should change the warped incentives that reward doctors and hospitals based on how many tests and procedures they do even if those tests and procedures aren’t necessary or result from medical mistakes,” Obama said.
Eleven months later, Medicare officials are preparing to draft regulations for one provision under health reform that policymakers hope will help achieve such a fix.
Under the law, Congress gave Medicare leeway to give healthcare providers that curb Medicare spending a share of the savings as long as they reach quality and cost-control targets. To be eligible, providers must create networks, known as accountable care organizations, that contract to manage care and curb spending for a specific group of patients. But how such ACOs will operate and whether they will help slow health spending as reform rapidly expands access—and demand—for medical care to an estimated 32 million uninsured remains unclear.
Federal officials must settle several key details before Medicare begins to make such payments in 2012 under the health reform law. A spokeswoman for the CMS, which oversees Medicare and the safety net insurer Medicaid, said in an e-mail that details would be released with upcoming regulations.
Among commercial insurers, medical groups and health systems, the law has prompted a rush to launch efforts in the private market in a bid to shape emerging federal rules, including a pilot backed by prominent health policy experts.
But questions dogging the private efforts underscore just how elusive such a fix could prove to be despite wide endorsement.
In the private market, insurers and hospitals are grappling to devise ways to project spending and potential savings and award incentives without running afoul of laws that prohibit physician self-referral and collusion
Caregivers at Fairview Health’s Eagan Clinic, here with Gov. Tim Pawlenty, third from left, are acting as a pilot ACO.