ACOs and Nephrology

Often compared to the health maintenance organizations (HMOs) of the past, accountable care organizations (ACOs) have taken the spotlight as a new model of health care delivery and payment under the Affordable Care Act. Mark McClellan, MD, PhD, former administrator of the Centers for Medicare & Medicaid Services and current director of the Engelberg Center for Health Care Reform, spoke about ACOs at the 2011 Kidney Week Christopher R. Blagg Endowed Lectureship in Renal Disease and Public Policy.

The main tenet of ACOs is to provide high quality (and low cost), coordinated care with payments based on the value of services versus quantity. While fee for service (FFS) payment systems can be used for ACOs, McClellan speculates that bundled payments for services will grow, especially with continuing bipartisan political support. He envisions a potential for savings through quality improvement with payments moving away from FFS and toward case coordination and case management fees driven by performance measures.

Physicians have an important role in helping design better systems of health care delivery, McClellan said. He called on nephrologists to continue to provide input, and ultimately be “bellwethers” for reforming care in other parts of the healthcare system.

The Mayo Clinic’s “Re-Engineering Dialysis” or RED program uses the principals of accountable care—aligning financial incentives, collaboration between providers, flexibility in care models, and partnering with patients, said Amy Williams, MD, associate professor of medicine at Mayo Clinic. The nephrology team at Mayo is working to better understand patient needs as a way to increase patient capacity to deal with their illness and thus decrease the burden of disease.

Mark Pauly, PhD, a health economist and professor of health care management at the University of Pennsylvania, took a more pessimistic view on ACOs. He argued that health care costs are being driven by an aging population, improvements in technology, and rising wages for health care providers, not by the costs of delivering FFS care. Pauly said that successful coordinated care models (e.g., Kaiser Permanente) have been very hard to reproduce. He forecasts that ACOs will eventually convert to de facto capitation. He suggests that instead of removing FFS as the dominant system of payment, it may be possible to take a market-based approach by titrating FFS payments down until payments are truly aligned with the appropriate number of services.

Williams and Pauly spoke at the public policy forum at Kidney Week 2011.

December 2011 (Vol 3, Number 12)