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Accountable Health Care

The Silent Health Care Reform
ma s s i ve re s tru c tu ri n g o f h e a l t h ca re d e l i ve ry i s ta k i n g p l a c e wi th d e e p e r i mp a c t th a n th e o ff i c i a l h e a l th c a re re f o r m .

Most of the discussion about health care reform has centered on the expansion of access to care for people not covered by health insurance. Surprisingly, there has been very little discussion about the delivery of care, which in fact is the root cause of a sick health care system that results in uncontrollable spending with limited transparency whether the money is spent prudently. Outside of the media limelight a massive restructuring of health care delivery is taking place under the banner of what increasingly is being called accountable health care. One example of a true model of accountable care stems from ancient Chinese medicine: the patient only paid the doctor if the cure worked. While we will never go back to this model in its purest form, health systems and payers all over the world are gradually moving toward accountable care models. This model has gained traction as a way to control costs while at the same time improving the quality of care. In essence, accountable health care means delivery of care by a physician, hospital or supplier (pharmaceutical, device or diagnostic) in a manner where you can clearly account for the quality of care as well as the cost it takes to deliver the specific care. This is quite different from how care is delivered today. In the current paradigm, the physician is being paid for the service regardless of whether it brings value or not. The payer (health insurer or government) in return pays for the service without having evidence whether the care delivered was appropriate or not. The patient, who receives the care, only pays a small portion (the co-pay), but
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Stig Albinus senior director

Stig Albinus is a senior director and the chair of APCO Worldwides global health care practice based in New York. salbinus@apcoworldwide.com

has very little, if any, information about the actual costs of care, and whether value was delivered or not, as there is no transparency regarding these matters. While the term accountability is more commonly used in the health care debate in the United States than in other parts of the world, the desire to address escalating costs while simultaneously enhancing the quality of care is similar in Europe, even though the focus there is more on shared responsibility between public and private partners as a way to deal with the reality of austerity. In the United States, the movement towards accountability has been building in the private sector for some time and took off in earnest with the 2010 Affordable Care Act, particularly the Medicare Shared Savings Program (MSSP) that created the framework for Accountable Care Organizations (ACOs). ACOs are groups of providers and suppliers (e.g., hospitals, physicians and others involved in patient care) that work together to coordinate care for the Medicare patients they serve. Today, more than 250 ACOs have entered into agreements with the Center for Medicare & Medicaid Services (CMS) taking responsibility for the quality of care in return for the opportunity to share in cost savings. The program assumes that Federal savings from this effort could be up to $940 million over four years. For now, most ACOs are focused on serving Medicare beneficiaries, but the number of ACOs is surging and the private sector continues to move forward creating their own versions of ACOs, sometimes called high-value networks. The trend is not entirely new. Vexed by inexorably rising costs that have eaten into earnings and stunted wage increases, large employers in the United States have demanded more accountable care delivery from payers for a decade. One of the first-movers was the Bridges to Excellence (BTE) program that was created in 2002 by a group of employers spearheaded by GE. BTE established a program for recognizing physicians with financial rewards in return for achieving specific measures for the quality of care for patients with chronic conditions who are most at risk of incurring potentially avoidable complications. Furthermore, there are accountable health care initiatives outside the ACO-framework. In a bold move, New York Citys public hospitals announced in January 2013, a new pay-for-performance agreement that will reward doctors with up to $59 million in incentive payments over the next three years for meeting the public hospital systems goals to improve patient care, efficiency and patient satisfaction. Europes economies and health care systems will continue to face great stress over the coming 10 years, and this means doing things differently. Public-private partnerships are increasingly seen as the way forward to solve issues such as the lack of funding in health research; to address chronic

diseases and promote healthy aging; and to create more sustainable and efficient social and health care systems in Europe. Although economic and political pressures create a challenging environment for collaboration, a recent pan-European APCO Insight survey among policymakers and influencers showed that there is a growing expectation that industry, together with other stakeholders, will work with governments to ensure the future sustainability of health systems and address performance challenges across Europe. In addition, there is a growing expectation that companies become part of the health care value chain and engage in the comprehensive delivery of care. Increasingly, the approach in European Union member states is to improve management through self-directed care where patients, physicians and companies partner in delivering better treatment and care. Another element is improving health system performance and delivery through system incentives, including best practice tariffs and pay-for-performance models. So what does this mean to the noble goal of improving quality of care and reducing costs at the same time? Is the goal realistic? Measure what matters: Studies and lessons learned show there are more gains to be achieved among patients who are close to achieving their treatment goals (for example in diabetes), than patients in poor control of their conditions. This raises the question how to improve quality of care among hard-to-treat patients who are less likely to comply with treatment goals. The other lesson is that clinical practice that is not measured does not improve. The question is whether the 33 quality measures stipulated for ACOs by CMS are sufficient since they only cover five chronic disease conditions among at-risk populations (diabetes, hypertension, ischemic vascular disease, heart failure and coronary artery disease). Pay-for-performance: The idea about paying physicians for performance against quality standards does appear more meaningful than current models where physicians are paid for episodic care, i.e., the volume of services. Studies about the impact of BTE indicated that financial incentives actually do matter to physicians, and that larger incentives yield larger participation in pay-for-performance programs. However, critics have pointed out that pay-for-performance models can have unpredictable impact on physician behavior, and that there are many ways in which physicians can game the system without outright lying about their behavior. In the UK, where the National Health Service (NHS) continues to expand use of pay-for-performance, the results have been less than promising. A study from the University of Nottingham showed that pay-for-performance can produce desired results, but that incentives defined by

economists dont always generate changes in behaviors among the frontline NHS staff that seems less motivated by rational calculations than the ability to work together in a supported way and to do what they all feel is the right thing for patients. Overcome complexity: A report from the Institute of Medicine Best Care at Lower Cost from September 2012 highlighted the complexity of Americas health care system as a driver of costs and a barrier to better health care: Pervasive inefficiencies, an inability to manage a rapidly deepening clinical knowledge base and a reward system poorly focused on key patient needs all hinder improvements in the safety and quality of care and threaten the nations economic stability and global competitiveness. Achieving higher quality care at a lower cost will require fundamental commitments to the incentives, culture and leadership that foster continuous learning. Regardless of the uncertainties surrounding the implementation of accountable health care, this movement will most likely accelerate over the next few years given the continued cost pressures from expanded access and growing aging populations. The transformation will significantly impact health care delivery and stakeholders in several ways: Shifting customer base: The pharmaceutical and medical device industry will be faced with new institutional customers and will have to overcome perceptions that they are promoting drugs and devices without thinking about their customers needs in managing against more comprehensive population health and financial goals. Industry should also expand its focus on innovation beyond R&D to pioneer innovative models for accountable care. Ensure value, not merely cost reductions: Payers and policymakers should strive to ensure that accountable care also implies better quality of care, not merely reductions in spending. Without continued innovations and incentives that fuel improvements in new discoveries, diagnostics and therapies, we will not find sustainable solutions to major challenges such as Alzheimers disease and we will not be able to transform cancer from a terminal to a chronic disease. Embracing a new model: Physicians and provider groups will need to proactively consider how they embrace integrated, accountable health care models rather than defend traditional fragmented delivery and episodic care payment models. Consumer education: Consumers and patients are largely unaware of the movement toward accountable care and its impact on health and patient satisfaction. This is a huge hurdle for successful adaptation of accountable care. As

accountable care increasingly replaces the old model, which is directed toward the sick patient, with an approach focused on self-directed care, preventative medicine and wellness, the consumer needs to be educated, aware and engaged to prevent disease or take action before the onset of disease. Increased transparency: The current system is far from transparent and accountable to consumers when it comes to the costs of care, reimbursement, co-payment and billing information. There is a need for better education and communication to modify perceptions and behaviors among multiple stakeholders to ensure the successful transformation toward a more comprehensive accountable health care system where responsibilities are shared among all key stakeholders in the health care chain. At the end of the day, affordable health care could become a win-win for all. But the health care system will need to change before that is achieved.

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