ACO models provide a road map for change

Primary Obstacles to Hospital-Physician Collaboration (PDF)

Accountable care organizations (ACOs) share certain characteristics, but may take different forms. According to James T. Caillouette, MD, physician leaders can align their goals with a hospital to create an effective vertically integrated model. Dr. Caillouette and Richard F. Afable, MD, MPH, presented a model of integrated care in a private (nongovernment) setting.

The Hoag Hospital has the largest market share in Orange County, Calif. The core challenges of waste and inefficiency, which have triggered government reform efforts, were no different in the Hoag experience. Both physicians and hospital leadership saw the need to align and partner to address the issue.

Dr. Caillouette’s 18-physician orthopaedic group was the first member of their independent physician association (IPA), but quickly realized the importance of size and eventually merged with their crosstown rivals. The IPA approached the hospital and suggested a 50/50 partnership, but met with resistance. Ultimately, however, the hospital recognized the increased efficiency benefits of the venture, and the orthopaedic group linked all systems with Hoag.

Since then, the hospital/physician partnership has established shared equity of an ambulatory surgical center and is working on an orthopaedic specialty institute venture. Drs. Caillouette and Afable observed that any healthcare community, given the right incentives and tools, can produce the same results in value and outcomes as an integrated system.

Quality in the ACO model
The ability to track and report on quality outcomes is part of the definition of the ACO. Both health outcomes for the patient members of the ACO and the quality efforts of the organization itself are part of the definition of quality. Such efforts might include effective use of an electronic medical record or appropriate resource planning.

Linking reimbursement to outcomes is one way to promote quality and improve the overall value of the health care provided. These outcomes will no doubt be publicly reported and compared to other providers.

In orthopaedics, definitions of “quality outcome” are still emerging. Orthopaedic outcome metrics have historically been objective and physician-defined, involving such measures as joint range-of-motion or radiographic fracture alignment. Increasingly, however, the definition of quality will be expanded to include and reflect the patient’s overall experience.

Restructuring definitions of quality outcomes to include more subjective measures should involve surgeon input. For example, length of time until the patient returns to work or sports following surgery might be one measure. Ideally, these outcomes should be defined by orthopaedic surgeons, who understand the limitations and complications of various surgeries, rather than by policy makers.

Registries may also be used to measure quality. Surgical registries have been used to track outcomes in joint replacement for many years; registries are now being established for other procedures to follow outcomes and enable the early identification of problem trends.

Collaboration and physician leadership
According to Robert Berenson, MD, vice-chair of the Medicare Payment Advisory Commission (MedPAC), the shared savings model as a financial incentive for collaboration and cost-containment is, overall, a poor motivator for change. The more powerful driver is the unsustainable course of increasing healthcare costs. He predicted that the trend will be to eliminate fee-for-service as a payment model. Thus, regardless of the specifics of healthcare reform, providers can anticipate profound changes in the system.

Of all the changes inherent in the described ACO models, the most challenging for orthopaedic surgeons may be the culture change. Yet this is also the most important change required for successful healthcare reform.

The AAOS fellows who discussed various components of vertically integrated care echoed similar themes. Whether the model is a fully intergrated system such as Geissenger or Kaiser Permanente, a partnership such as the novel Hoag model, or a bundled-payment project such as the ACE demonstration project, success depends on effective physician-hospital collaboration and shared values.

Based on a recent AAOS survey, most orthopaedic surgeons are positioned to work with their hospitals to develop innovative solutions to address the challenges of delivering high quality, cost-effective care to patients. The survey on hospital-physician alignment found that 73 percent of respondents reported a collaborative or cooperative relationship with their hospital. However, only 27 percent of responding surgeons held an administrative position at a hospital.

Increased presence in leadership roles can further enhance surgeons’ abilities to influence the evolution of integrated models in their hospitals and communities. For orthopaedic interests to be represented as the ACO models emerge, collaboration and leadership will be vital. Without physician participation—whether in collaboration and leadership with hospitals or in defining appropriate orthopaedic outcome measures—policy makers will shape healthcare reform. For the sake of patients and orthopaedic practices, orthopaedic surgeons must step forward.

Alexandra Page, MD, is an AAOS Leadership Fellow and member of the Health Care Systems Committee. She can be reached at alexe.page@gmail.com

Primary Obstacles to Hospital-Physician Collaboration (PDF)

Editor’s Note: This is the third and final article summarizing the presentations made during the AAOS Health Care Systems Committee Accountable Care Organization symposium.

Links to previous articles on this topic:
ACOs: The future of healthcare delivery?
ACOs: New models for care and compensation