The Obama administration has filled in some of the blanks in a key part of the health care overhaul. The administration proposed rules Thursday to define Accountable Care Organizations, which are meant to save hundreds of millions of dollars in the Medicare program while improving quality for patients.
ACOs are still largely theory. No one seems to be able to define them in less than 100 words. That's because there can be as many variations of them as there are doctors and clinics.
Accountable Care Organizations appear to have two main ingredients -- better coordination of patient care, and financial incentives for doctors and clinics based on whether patients improve.
The ACO concept is based on the idea that there are too many individuals involved in a patient's care who often don't consult with each other. Critics say this lack of communication leads to poorer patient care and higher costs due to medical errors, readmissions to hospitals, and duplication of tests.
Abbott Northwestern Hospital in Minneapolis has begun to move down a more coordinated care path with staff members called care guides -- people who check in with patients between doctor visits.
One of those care guides is Jane Skinner, who calls patients who have chronic illnesses such as diabetes, high blood pressure and heart failure -- the kinds of illnesses that can be costly if not well managed.
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Dr. Penny Wheeler, Allina's chief clinical officer, said the care guides can be very valuable.
"We had one gentleman whose ... high blood pressure was just out of control, and they tried several different medications. He was reluctant to admit to his doctor that he couldn't afford the medication, but he admitted that to his care guide. And we were able to give him some prescription assistance," Wheeler said.
Wheeler said patients working with care guides to manage high blood pressure found their control of the condition improved by 30 percent. But Wheeler said it will take at least another year of study to determine whether care guides actually reduce costs.
Saving money is a key goal, because the ACO concept puts doctors and hospitals more at financial risk for patient health.
Right now, the current system pays doctors and medical centers by the number of procedures they perform. But in an ACO, if a patient has to be readmitted to the hospital because of a lack of followup care, the doctor and hospital would be on the hook for the additional cost.
The Obama administration claims the ACO approach could save the Medicare program nearly $1 billion over the next three years. But a study published in the New England Journal of Medicine found half of 10 ACOs reviewed hadn't achieved any cost savings over three years.
Co-author Keith Kosel said the coordinating of care is absolutely essential in trying to stem spiraling health care costs. But he cautions officials against expecting too much in savings.
"This is a new concept that has not been tested, except in a very limited application," said Kosel. "And that application ... basically showed that it was much harder to get the savings they had hoped for than people would've probably thought."
When asked about the government's projected savings in light of the study, Don Berwick, the head of the Centers for Medicare and Medicaid Services, acknowledged it's difficult to come up with precise numbers.
"They are estimates only. Understand the model that generates these estimates is rather complex, and there's uncertainty as to how this will play out," Berwick said.
Nonetheless, some health care organizations are already traveling down that road. In addition to Abbott Northwestern's care guide program, Fairview's hospital system in Minneapolis has shared savings arrangements with several Twin Cities health plans.