Medi­care of­fi­cials are ready to draft ac­count­able care or­ga­ni­za­tion reg­u­la­tions, but le­gal, eco­nomic and or­ga­ni­za­tional chal­lenges re­main

Modern Healthcare - - Front Page - Melanie Evans

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.

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