The Centers for Medicare and Medicaid Services earlier this month announced the creation of a new accountable care organization model. The Next Generation ACO provides "more predictable financial targets" and more care coordination and beneficiary engagement opportunities, according to Patrick Conway, MD, chief medical officer and deputy administrator for innovation and quality at CMS. It addresses many of the concerns raised about previous Medicare ACO models with regards to risk, offering four payment systems and two risk tracks, including one that is "essentially near 100% risk."
For Dr. Robert Pearl, Chairman of the board of the Council of Accountable Physician Practices (CAPP) and Executive Director and CEO of the Permanente Group, that's not enough. As you might expect from a CEO from the Kaiser fold, Pearl supports a physician-directed integrated care system as the avenue to delivering Triple Aim care. CAPP provides leadership and sponsorship for "initiatives that inform both providers and the general population of the benefits of receiving medical care at large multispecialty medical groups and integrated health systems."
Healthcare Dive sat down with Dr. Pearl at the World Healthcare Congress meeting in Washington, DC this week to discuss why ACOs aren't a sufficient model to transform care.
The four pillars
For Dr. Pearl, there are four pillars that it will be necessary for the industry to support going forward in order to "solve the American healthcare challenge without devolving into a two-tier system":
- Integration, meaning that "all the parts have to work together as one so patients don't fall through the cracks," Pearl said.
- Technology, or "a combination of not just the electronic health record, but also tapping into mobile, video and digital."
- Prepayment, "so you align the incentives of doctors and patients."
- Physician leadership, "which I think has not been particularly evident up until now."
All four of those pillars might sound intuitive—if not basic—but Pearl cautions "easier said that done."
"Making any of those four happen is very difficult," Pearl told Healthcare Dive. "It's not that we don't know that that's the destination, it's just making it happen."
While there are incremental steps that providers can take to sustain those four pillars, Pearl says, the challenge is that in the real world, it's still easier today to compete by doing more fee-for-service work—and the decision to commit to value-based contracts can be an all-or-nothing decision with a steep drop.
"If [fee-for-service] is not sustainable, at some point you have to leap," Pearl said. "And it's not a slide, it's a step function. That's what everyone in healthcare today is grappling with: When do I leap?"
Why ACOs aren't enough
Involvement in ever-evolving models of accountable care organizations has been widely touted to be the solution to fragmented care—even if they aren't fully developed yet. But for Pearl, they are an incremental step on the journey, a model that isn't quite nimble enough.
"It meets the criteria of integration, theoretically," Pearl said. "It theoretically could have a master system of technology. It theoretically could take some prepayment. But it has a lot of challenges."
The primary problem with the ACO model, according to Pearl, is that it's very difficult to "right-size"—essentially, it’s tough to scale to create efficiencies. "Maybe there are four hospitals and you only need two hospitals," Pearl said. "Or maybe the community has 20 orthopedists and only 10 cardiologists." ACOs, inclusive as they are, can struggle to permit strategic pruning.
Beyond the ACO
The model that offers the most value, efficiency and quality, Pearl believes, remains the integrated care model that organizations like Kaiser Permanente and the Mayo Clinic have been leveraging for decades. The CAPP mission echoes that attitude, perhaps a natural one for someone with Pearl's background to adopt. The organization "promotes the superior performance of our physician-led medical groups and health systems in providing patient-centered medical care."
"ACO is not the destination," Pearl says. "It's beyond ACOs. It's Mayo Clinic, it's Intermountain Health, it's Kaiser Permanente who have figured out how to create a culture that evolves over time."