If newspaper stories written 10 years from now say something like “the Medicare program is continuing its slow move away from fee-for-service payment that rewards high utilization, and towards risk-based payment that rewards providers for keeping patients healthy and improving quality of life” then the ACO draft regulations will have been a step along the way. Simply put, these regulations provide the rules under which health care organizations can reduce per capita Medicare spending for a group of patients and legally keep some of the savings as extra revenue. The definition of exactly what an accountable care organization is remains a bit murky, but that provides the runway for the private health care delivery system to innovate, and get paid for success.
Aaron has provided great insight into the financial incentives inherent in the draft rules (with pictures!). I want to briefly touch on something that was left out of the draft ACO regulations, but which can and should be an important part of seeking to improve the value of care provided to patients: palliative care. Palliative care is care that seeks to improve quality of life and help patients clarify their goals of care, regardless of prognosis. Hospice is a subset of palliative care that has been shown in some work to reduce Medicare costs and improve quality of life, and is provided to persons believed to be in the last 6 months of their life; the Medicare program instituted the hospice benefit in 1983, and in doing so, helped to mainstream the concept in the United States (over 4 in 10 Medicare decedents now use some hospice prior to death).
Palliative care is not discussed explicitly in the ACO regulations (the word palliative does not appear; the word hospice appears once) likely due to the hot button nature of end-of-life ‘discussions’ during the ACA debate when expanded payment for palliative care consultations became ‘death panels.’ One August later, a randomized control trial found that early palliative care for patients with stage IV lung cancer improved quality of life, reduced resource utilization and extended life by 3 months (12 months v. 9 months). Around the same time, Atul Gawande beautifully wrote about palliative care in a New Yorker essay. The care that was pilloried as being so bad, actually turns out to be quite important. Any health policy discussion that aims to improve the value of what Medicare spends on health care has to include palliative care.
At their heart, the ACO regulations are an attempt to incentivize the movement towards value in the Medicare program. I would define value as care that improves quality of life and/or extends life span. Palliative care is now commonly provided in most large hospitals, but is harder to provide in smaller ones because such services typically must be cross-subsidized due to low reimbursement rates. Community-based models exist, but are more rare, in part due to reimbursement issues. During the public comment period on the ACO regulations, it will be interesting to see what comes from the palliative care community. Even more interesting will be to watch the degree to which palliative care is integrated into ACOs and whether such of integration will be related to the relative success of ACOs, both in financial terms as well as in improving quality.
