Are ACOs Just the Managed Care of the 90’s?

October 23, 2014
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Accountable Care / Managed CareA major theory driving the criticism of Accountable Care is that ACOs are, in fact, just a glamorized version of the A major theory driving the criticism of Accountable Care is that ACOs are, in fact, just a glamorized version of the Managed Care Organizations of the 1980s and 1990s which, historically, didn’t work as intended and therefore would be a mistake to bring back into circulation. The period of time that critics are harkening back to, a few decades gone by, coincides with the last major healthcare reform in American history. During this time, the first major payer shift occurred. In response to the development of HMOs in the late 70s, managed care was an early attempt to control healthcare spending. It is even more imperative now than it was in the 1980s, when the economy was in a far more sunny place than it is at present, where we are still climbing out of a recession. The problem with these early MCO models was that they were primarily profit-driven and for consumers, this created problems in accessing care. It also increased the disparity in coverage – the haves and have-nots – because many people could not, and especially cannot now, afford to purchase private insurance. In 2002, we saw another major uptick in healthcare spending and once again it became obvious that we needed to develop a strategy for controlling cost – while also avoiding the repercussions we previously saw in MCOs that negatively impacted access to care for patients. This is a precarious balance and it proved to be immediately difficult for not just payers, but providers and patients as well.

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In 2010, the Affordable Care Act launched a coverage reform while also establishing the need – and setting the standard- for coordinated care. No longer was it acceptable for patients to “fall through the cracks” – and with the advent of the electronic medical record, there were far less legitimate excuses as to why a patient’s needs were overlooked. With this too arrived the concept of The Triple Aim, which has created an equal playing field not only for patients, but providers and payers. It’s no longer enough to provide good care, you must do so as efficiently as possible while also spending as little money as possible: no small task.

Another way that our current healthcare reformation differs from the last is that we are now more than ever aware of the need for a population health focus rather than the individual. While it is often said that “healthy people don’t make money” for healthcare, that is precisely the kind of improperly focused thinking that has caused costs to skyrocket in the last decade alone. ACOs will shift the focus to a broader picture of healthcare. Our population’s health is reflective of our healthcare system’s health. MCOs, on the other hand, were not aware of or ill-equipped to tackle the “bigger problems” in healthcare, and therefore stuck to relatively small potatoes. With our annual healthcare spending continuing to spiral out of control- while our quality of care and access to care has not similarly spiraled upward – it’s clear that the focus needs to encapsulate much more. Through coordination of care, which EHR’s will no doubt continue to support, ACOs will allow patients to have a care team that works in tandem to support them regardless of where they go to receive treatment. It is no longer acceptable for physicians to work in silos, nor is it any longer the norm for physicians alone to be the “keeper of solutions” – with the internet, now more than ever patients have access to information that can, if accurate, inform them and provide confidence for advocating for their needs. The healthcare system would be wise to embrace that, since ACO’s payment standards will be largely focused on patient reported measures, like satisfaction with care.

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Managed Care does have some similarities to Accountable Care, but the differences are very important to consider; in many ways, Accountable Care is a more evolved and informed form of Managed Care which has had the privilege of several decades to observe what the major conflicts and challenges in healthcare reform are. As we continue to move away from fee-for-service and embrace models of payment that are not going to be wasteful and easy to abuse, we will hopefully also see less and less substantiated arguments that claim ACOs are largely ineffective. While it is too early for anyone to know for sure the impact of ACOs, preliminary data would suggest that we are off to a respectable start.