Don’t Kick a Unicorn When it’s Down

There has been a significant outcry against the proposed ACO regs: everything’s wrong and nothing’s right about them, or so some would have us believe.  (The comment period is still open, and CMS is still soliciting input; much of the outcry is a form of posturing and negotiation … not that there’s anything wrong with that.)

Today’s “nattering nabobs of negativism” focus on: the estimated price tag for complying with the regulatory requirements (IT and other infrastructure incuded), the slim chance of success by ACOs in righting the wrongs of decades of bloat in the health care system, the premature pledging of allegiance to an idea only partly proven through the PGP demo, the likelihood of failure due to the whole endeavor’s being tied to FFS reimbursement, on the one hand, and due to exposure of ACOs to downside risk, on the other, the unreasonable reliance on dozens and dozens of quality measures . . . and the list goes on.  For further detail, see, e.g., David Dranove’s recent post decrying unproven theories baked into the ACO program (with a link to info on the PGP demo’s results, and differing interpretations of those results; check out the lively discussion in the comments to Dranove’s post on The Health Care Blog), Jeff Goldsmith’s opposition to ACOs as conceived in the ACA (and alternative proposal discussed in the linked post), and Mark Browne’s search for a few good quality measures. (This has been a recurring theme for me as well; I would love to find six or eight meta-measures that predict all others; Mark links to the AHA’s comments on the ACO rule, which are worth a read).

My reaction to the flurry of commentary on the original draft rule, and on the more recent proposed changes to the ACO program, is to remind everyone of two important facts: First, despite the overemphasis put on the ACO rule by everyone and his brother, ACOs are just one of a number of experiments, or changes to the health care system, encouraged and enabled by the ACA.  Second, the Marshfield Clinic did pretty darn well under the PGP demo, so, while more tweaks may be needed, the ACO model (however you may want to tag it — old wine in new bottles, or what have you) has at least some merit to it.  Nobody’s forcing all providers into ACOs — though many providers have adopted, and are continuing to adopt, certain of the characteristics of ACOs.  The ACO statute, and therefore the draft regs, represent an essentially American product: a mix of forward-thinking experimentation and special-interest lobbying.  As a humorist of an earlier century would have it, rumors of its demise are greatly exaggerated.  Or, to quote a more nearly contemporary comedy troupe, it’s “not dead yet.”

The key to achieving a high-performing health care system will be a fundamental shift away from fee for service payment mechanisms.  It’s too bad that the ACO statute didn’t take that leap; however, the tenor of the ACO rule gives me reason to hope that the CMS Innovation Center will use its authority to move in that direction sooner rather than later.  And, as ever, the laboratories of the states are in some cases a few steps a head of the federales.  (Consider the all-payor ACO and bundled payments bill filed by the governor of Massachusetts.)

The longer we take to make this fundamental shift, the longer we will be dealing with the legacy of problems tied to this legacy system.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting