Of ACOs And Proton Beams: Why Hospitals eLive In Two Worldsf
By Jenny Gold
June 6th, 2013, 5:58 AM - Kaiser Health News
For the past several years, hospital CEOs have been talking a big game about
accountable care—the latest health care model, which pays doctors and hospitals
for quality, rather than the volume of services they provide. ACOs make
providers jointly accountable for the health of their patients, giving them
financial incentives to cooperate and to save money by avoiding unnecessary
tests and procedures.
But investing in risk-sharing doesnft mean health
systems are giving up on the fee-for-service system, which rewards providers for
every test and treatment whether or not it improves the health of a patient.
Just last week, the District of Columbia approved
applications from MedStar Health and Johns Hopkins Medicine to build proton
therapy centers, a new-fangled radiation treatment for cancer that has not
been proven to work better than standard radiation for the vast majority of
cancers, but costs twice as much. Both health systems are also pursuing
risk-sharing—MedStar is involved in launching
an insurance product, and Hopkins has held
itself up as a model of how shared savings can work in an academic medical
center.
gIt doesnft surprise me at all,h says Chas Roades, chief research officer at
the Advisory Board Company in Washington, D.C., which is also helping to launch
the MedStar insurance product. gFor every CEO whofs considering a risk-based
strategy like an ACO or bundled payments, the dilemma they have is that they
have to live in two worlds at once.h A small part of their business might
be invested in population health and minimizing utilization of services, Roades
explains, but theyfre still dependent on the revenues from their fee-for-service
contracts.
gThe ACO business isnft big enough to throw their fee-for-service revenue out
the window,h he adds, especially since that may help finance the investments
needed to make shared risk successful, such as hiring primary care doctors and
buying new health IT services.
And itfs not just proton therapy, says Roades. ACOs are also continuing to
invest in free standing emergency rooms, other new radiology equipment and
surgeries that use expensive implantable devices. Those services are often
crucial to attract the best physicians, who want to use the most advanced
technology. Consumers also use technology as a proxy for quality, choosing to
have procedures done in hospitals that advertise the shiniest new machines.
gIt makes me wonder if people are taking this ACO thing seriously are not.
Maybe they think itfs not really going to stick,h says Erik Johnson, a senior
vice president at consulting firm Avalere Health. The trend calls into question
gthe idea that the ACO is the magical elixir that will drive down utilization,h
he adds.
The problem is that the incentives in the Medicare ACO program simply arenft
strong enough to counter the draw of lucrative volume-driven care. gThis is a
very slow tectonic shift that Congress is trying to drive,h says Johnson. gThese
are baby steps.h
So even though capital investments like proton therapy centers gwould be
deadweight on their balance sheetsh in a risk-based system, gthey donft see it
happening for years to come, so therefs still time to milk the fee-for-service
cow.h