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May 27, 2011
ACOs and the "medical home"

The recent debate over health care, including proposals to reform Medicare, keeps generating ideas to control health care expenditures while increasing safety and efficiency. A couple of ideas that have garnered significant attention are the creation of accountable care organizations (ACOs) and the concept of the medical home.

According to the Centers for Medicare and Medicaid Services, the Affordable Care Act established the creation of ACOs as a way to foster "team-based health care," encouraging physicians, hospitals and health providers to achieve cost-savings by improving care coordination across the health care spectrum. According to the law, each ACO would have to care for at least 5,000 Medicare beneficiaries for a minimum of three years.

Here's the incentive: An ACO gets to keep a portion of any savings it accrues by meeting certain quality and efficiency standards. (The New York Times reports that Medicare will distribute between 50% and 60% of savings to hospitals and doctors who meet quality and savings benchmarks.) The concept is similar to the idea behind multispecialty groups, except that the goal is not to aggregate health services into the sort of "medical mall" of multispecialty groups, but to actually create mechanisms within those groups to improve communication, increase efficiencies and decrease waste. If multispecialty groups are medical malls, ACOs are the medical Toyota plant.

The concept of the medical home is similar to an ACO, except that the medical home focuses on single practices. The medical home strives to achieve the same efficiencies that ACOs intend to produce, with the care of individual patients being coordinated by a primary care provider who forms the axis of all medical activity for that patient.

While the medical home is a single practice, an ACO may have several practices and specialties under its umbrella. The goal of both is to reduce waste and costs while improving care.

According to the American Hospital Association (AHA), the main difference between ACOs and medical homes lies in their incentive structure. The medical home does not have "explicit incentives for providers" to work toward reducing costs and improving quality. Likewise, primary care providers may lack the resources, including time, to coordinate the many layers of a patient's care. Of course, the use of integrated information systems and other tools can help improve communication and efficiencies across different care settings. But the use of those tools is likely to be burdensome for some cash-strapped practices and solo providers.

So how do hospitals and hospitalists figure into the ACO and the medical home model? Although hospitals are not required to form ACOs, the new model represents an opportunity for health systems to consolidate and grow. There is the potential for this unintended consequence: driving down competition, therefore decreasing the impact of any health savings by increasing costs. Also, hospitals could run afoul of antitrust laws if, for example, they buy up most of the practices within a region.

Hospitalists figure to be at the center of any accountable health organization—and hopefully, we will be entitled to some of the savings that we help generate. That means we may very well end up with some of what the AHA called "explicit incentives." Just as the primary care doctor was the "gatekeeper" in the HMO era and is the primary cog in the wheel of the medical home, the hospitalist will become the primary efficiency and waste manager.

Our role will be to coordinate multiple specialists and hospital services, improve communication, and make the hospital an efficient, patient-centered environment. While primary care practices may have the "medical home" designation, much of the coordination of care that medical homes are supposed to orchestrate will actually be under our control. Our inpatient units will, at the very least, be very big rooms in the establishment of any medical home. The same skills that made hospitalists a "must-have" service will also make us an integral component of whatever future cost-control structure the government and private insurance dream up.

It seems that the hospitalist movement was years ahead of the current health care debate. Our job is to use this experience to make sure that accountable care organizations remain accountable, not to the government or to health systems but to our patients.

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About Ruben J. Nazario, MD
Ruben J. Nazario, MD, is now medical director at Inovalon, a health care data analytics company, and is medical editor for Elsevier's First Consult. A pediatric hospitalist, Dr. Nazario is a veteran of both community and academic pediatric hospitalist programs. All material represents his own views and does not reflect the views of his employer.
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