Will ACOs fail?

The cHealth Blog is coming up on its 3rd anniversary and during that time I’ve taken my share of pot shots at organized medicine. Most implementations of connected health are in some way disruptive to the status quo, so I can’t help but point out those opportunities and barriers.

So I was surprised at my reaction to a recent editorial in the Wall Street Journal by Clayton Christensen and colleagues.  The main premise of the piece is that the concept of Accountable Care Organizations (ACOs) is misguided and that these organizations will be more likely to fail than not. I’ve been an admirer of Christensen’s work over the years and as you might expect, there is a lot to like in his WSJ piece.  However, as I watch healthcare providers in our integrated delivery system deal with the challenges of payment reform and accountable care, I am more optimistic than dismayed.  Let me go through the WSJ piece point by point and offer some thoughts.

For me, the first red flag is the assertion that ACOs are ‘latter day health maintenance organizations.’  The biggest difference in HMOs, as we experienced them, and ACOs are the locus of execution.  The HMO was a health plan-based organization.  With the exception of some of the early staff-model HMOs, these organizations were constructed to give providers financial guard rails without any tools for delivery reform.  The ACO is provider organization-centric.  I guess we can argue that this amounts to a ‘fox in the hen house’ situation, but as I see our own strategy unfold, I am optimistic. I see doctors saying things like, “This is how I always wanted to practice medicine.”  Giving provider organizations the financial risk is step one. They can use internal payment structures to motivate doctors to care for patients in more effective, but more efficient ways.  The IT tools at hand to facilitate this population-based payment management are breathtaking, from registries to data analytics to connected health. We’re using all of them at Partners and our goal is to transform care delivery.

The next logical misstep is saying that ACOs will not succeed without changing doctors’ behavior.  No argument with this premise on the surface. But I was puzzled by the lack of discussion of payment reform strategies (shared savings, bundled payments, full capitation) and how these will motivate changes in provider behavior.  It may surprise a number of people to learn that many of the doctors at Partners HealthCare (and elsewhere) are tired of the mouse’s wheel of fee-for-service reimbursement and welcoming of the opportunities to re-think care delivery.  I see MD thinking and behavior changing.  Whether it will change fast enough is still an open question.

Most ACOs are large organizations, and healthcare organizations are by nature conservative because we are overshadowed by our “do no harm” Hippocratic oath.  I’d love to speed up the process here at Partners, but I am comfortable that the process is well designed and will lead to the right changes in physician behavior.

Further along is the statement that we’ll not succeed without changing patient behavior.  This is where I find myself in resounding agreement with the WSJ authors.  If there is a flaw in the thinking of our government ACO architects, I’d say it’s here.  It’s not so much that we as providers can’t hold patients accountable for their health, though we can’t. But rather that the prevailing sentiment nationwide is that chronic illness is an accident that leaves patients as victims to be cared for and covered by insurance.  The most effective way to move patient/consumer accountability forward would be to acknowledge that lifestyle plays an enormous role in our most prevalent and costly illnesses.