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Saturday, February 12, 2011

Accountable Care Organizations: Another exercise in triangulation

We are at a cross road. We cannot continue to travel down the road we have been traveling. We are bleeding and going deeper and deeper in debt. Even the most optimistic actuarial projections do not contest this. The only point of contention is when the day of reckoning will occur.

Our ability to respond rationally and effectively is limited since so much of our resource allocation machinery in health care has been moved into the political realm and not surprisingly, there is not sufficient political will to make impossible political decisions. Anyone within the political realm who attempts to explicitly acknowledge that scarcity matters will never be elected or at least re-elected. You cannot say no to the electorate and because of those constraints, we are virtually guaranteed to spend more than we should and allocate resources inefficiently when they are moved into the political realm. It has become a political hot potato to actually admit that there are limits to what can be done. From yesterday's WSJ:

Indiana Gov. Mitch Daniels, who is considering a run for the 2012 Republican presidential nomination, veered from his party’s orthodoxy on end-of-life care Friday, suggesting the nation cannot afford to provide every treatment and technology available for every single dying patient.
“We all want to live forever. We want everything done to help us,” he told health care reporters during a discussion of Medicare and its financial pressures. “And we cannot, no one can, do absolutely everything that modern technology makes possible for absolutely everyone ’til absolutely the very last day, the very last resort.”
He added that he understands the urge by families to push for what may be futile care. “It’s the most human thing in the world,” he said. “Your loved one is in desperate shape.” He said “we can try this thing that has almost no chance of working” but questioned whether it is worth it, especially given that “it’s going to cost an incredible amount of money.”
Many health care experts have voiced similar views, saying doctors and families need to do a better job at making choices at the end of life, but the subject has been politically taboo.

Politicians simply cannot make these decisions with "commonized" resources. In addition, private insurers may be equally bad at this. Out of the wilderness comes the ACO to the rescue. From obscurity no more than five years ago the ACO has moved to the centerpiece of the most ambitious piece of legislation of my lifetime. It is a brilliant political move which has played upon physician egos to move making the tough (if not impossible) decisions from the insurance companies and state bureaucrats to physicians. However, we are going to find ourselves in the unenviable position of which party we will need to team up with to achieve our goals of both saving money and improving quality of care. 

That is the problem with triangles or financial arrangements where it is not clear who the buyers and sellers might be, and a clear understanding of who  is paying the bills. There is no limit to the appetite of patients for consuming health care when consumption is unlinked to their individual resources. In the realm of little or no addition cost for any service rendered, it is essentially impossible to define value or lack thereof.  If physicians team up with patients we cannot control costs. Make efforts to control costs and we are forced to team up with payers to beat up on patients, particularly if the model is based upon gain sharing from cost savings that derive from stinting on care. 

The retort is that it is both savings and quality which matter. However, the only real hard measures revolve around dollars and cents. We have many systems that are very good at counting money. On the other hand, quality measurement in health care is in an infantile state and is for the most part unmeasurable and infinitely open to gaming. 

The actual consumers of health care need to wake up and understand that their needs are best served when they directly control the resources needed to purchase the health services they desire and need. When the first financial transactions involved are to take all the resources away from them and shunt them to other parties, they have lost almost all leverage. As structured now, responsiveness to patient needs become blunted by the creation of very long and inconsistent feedback loops, either through the electoral process or through annual benefit selection activities, neither of which are particularly robust.  It has taken over 50 years to show that the third party payment model for healthcare has spawned a system which both costs too much and delivers too little of what people actually need and want.    

1 comment:

  1. There is no limit food intake the patients health care consumption, consumption is not their personal resources. In the region, with little or no cost to provide more services, it is almost impossible to define the value.

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