Opinions about health care reform are plentiful, but Thomas H. Lee, MD, would rather hear solutions. When last year’s Affordable Care Act offered a new model called accountable care organizations (ACOs), Lee assessed the entity’s viability in his role as network president of Partners HealthCare System, based in Boston, Massachusetts.
With political philosophy inevitably linked to any new health paradigm, he attempted to analyze ACOs in the context of Partners’ specific mission, as well as taking into account the policies of his home state. “In Massachusetts, we are maybe ahead of the rest of the country because virtually everyone is covered,” explains Lee, who also serves as associate editor of the
New England Journal of Medicine (NEJM). “When you make a commitment to cover everyone, it naturally leads to incredible interest in the cost of care. It puts pressure on everyone, including providers, to be part of the solution and figure out how to make health care affordable.”
The act of becoming an ACO is not theoretical for Lee and his colleagues at Partners. In fact, they are actively renegotiating contracts and changing them from fee for service to global budgeting based on total membership, with per-member-per-month spending for HMO contracts.
Any organization that ponders ACOs must ultimately contemplate new payment arrangements, a process that is always stressful. “Either we are going to take lower payments under fee for service, or we are going to be in new models of contracting where we get rewarded if we can figure out how to deliver good outcomes more efficiently,” Lee says. “For us, we don’t have a choice. Assuming we continue to try to cover everyone in Massachusetts, we are going to have to adapt or ugly things are going to happen in fee for service.”
ACOs came along at a time when officials at Partners were willing, from a cultural standpoint, to try new models of payment. “I’m glad to say that everyone in our organization is completely for continuing to cover everyone in Massachusetts,” Lee says. “Once you have covered everyone, you realize it is the right thing to do, and there is no going back. Covering all of our citizens is a design constraint for Massachusetts. It demands something different from business as usual.”
Motivated by the discontinuity in health care, and the inherently inflationary nature of fee for service, Partners’ board members discussed options and gathered wisdom from many different sources. Prior to the concrete steps at Partners, for example, Lee spoke with colleagues such as Elliott S. Fisher, MD, MPH, as part of an
NEJM roundtable discussion last year.
As director of the Center for Health Policy Research, and a professor of medicine at Dartmouth Medical School, Fisher pointed out that a number of Medicare pilots had already been tried. “We have five pilots around the country that are already embarking on forming these payment arrangements with their private payors,” Fisher said. “And most of the private payors are involved in trying to work on this as well.”
Outside of Massachusetts
Comments under Lee’s ACO roundtable video
1 reflect an antagonism toward ACOs that any organization would likely face during a transition. “This is not even close to real world,” writes one DO in Bethesda, Maryland. “ACOs are another impediment to the practice of internal medicine, creation of more regulation, and indistinct improvement in health care for all.”
An MD in Jackson, Wyoming, writes: “I assert that government regulation of the payment side cannot drive reform! The government must also regulate the punitive medico-legal side, which cannot be left out of the equation! Only by giving caregivers the medico-legal protection to do simply what is medically necessary will reduce costs. So let’s be real, bundled payments/ACOs are a threat to physicians.”
Lee understands the concerns, but criticisms without detailed alternatives do not interest him. “If they have a better idea, I would love to hear it,” Lee muses. “But as they come up with their vision of what should happen, they should understand that the goal is not just to protect their income. The goal is to meet society’s needs. Of course, there are many physicians who are going to be unhappy hearing that anything needs to change.
“I don’t blame them, because they are good hard-working people doing good things for patients,” Lee continues. “We can’t just continue to do what we do and expect that nothing will change in an era where the global economy is changing and we are losing jobs. In Singapore, the percentage of health care that goes to gross domestic product is 4% versus 17% in the United States. Physicians who are just being critics should understand that they are being critics and someone must try to write the play.”
Partners’ Approach
Writing the play at Partners first required a hard look at the mission of the company that was founded in 1994 by Brigham and Women’s Hospital and Massachusetts General Hospital. Partners HealthCare now includes community and specialty hospitals, a physician network, community health centers, home care, and other health-related entities.
As a teaching affiliate of Harvard Medical School and a not-for-profit company, Partners’ officials determined that the overarching goal of the organization was to improve the value of health care. “We need something more than trying to preserve our income,” Lee says. “That is not going to be a rallying cry for any group with any kind of mission. Improving the value of health care is something that everyone agrees upon. We are trying to improve outcomes and the efficiency with which we deliver those outcomes.”
Lee acknowledges that the concept of “value” has long aroused skepticism in the medical community, but he says practical and moral considerations will ultimately push organizations toward the ACO model. An article by Lee in the December 23, 2010, issue of
NEJM2 reiterates the concept, and he contends that in an environment with so many opinions, clinicians can ultimately rally around value.
“In this fractious context, value is emerging as a concept—perhaps the only concept—that all stakeholders in health care embrace,” Lee writes. “Providers, patients, payors, and policymakers all support the goal of improving outcomes and doing so as efficiently as possible. No one can oppose this goal and expect long-term success, just as no one in a for-profit company can resist decisions likely to enhance long-term shareholder value. The value framework thus offers a unifying orientation for provider organizations that might otherwise be paralyzed by constituents fighting for bigger pieces of a shrinking pie.”
Greg Thompson is a contributing writer for HealthCXO.