Opinion Column

The ‘Missing Link’ In ACOs: Patients

In 2009, researchers reported the discovery of “Darwinius masillae,” a small lemur-like creature that lived some 47 million years ago. Many paleontologists have postulated that D. masillae was the missing link, marking the point at which the evolutionary lineage of humans diverged from that of more distant primates.

It seems to us that, in the recent debate about accountable care organizations, one could also detect a missing link.

ACOs Explained

What’s an ACO? Read our explainer on the topic:

Regulations will soon be released providing insight into how health care entities and networks qualifying as ACOs will be compensated by Medicare for “bending the cost curve” and improving care. It’s commonly held that these systems will lead to better treatment for individuals, improved population-wide health and lower costs.

Advocates maintain that ACOs will achieve these goals as a result of adjustments to provider payments designed to give physicians incentives to get their patients to stop smoking, lose weight, take medications, get vaccinated and avoid alcohol excess, among other healthy behaviors.

But is it realistic to leverage the success of these organizations on physician incentives alone? Or might the ACO concept have its own version of the D. masillae? In other words, what about patients? Might they be that mysterious point that determines the effectiveness of ACO evolution?

To date, ACO thinking has focused on rewarding the health care provider to promote wellness, prevention and cost-effective behavior. However, when someone makes choices shown to reduce life expectancy and increase health care costs, shouldn’t he or she be held accountable, too? How can we amend the Medicare and Medicaid benefit structures, or the permitted uses of the savings realized by the Medicare program, to motivate those currently without an incentive to change?

Evidence shows that rewards can be a powerful motivator for people to alter behavior. For example, an increasing number of employers, including IBM, Safeway and AmeriGas, are granting premium discounts to those employees who practice “good health habits,” such as getting check-ups, breast and colon cancer screenings; stopping smoking; and losing weight. In addition, Georgia’s Medicaid program offers pregnant women a $20 gift card for keeping appointments during each trimester of pregnancy, while Ohio’s covers alcohol and substance abuse services.

Meanwhile, Medicare has established a pilot project in which primary care providers would receive a 10 percent bonus payment for office and home visits, where it is anticipated they will spend more time counseling patients about healthy behaviors. Again, this raises a critical question: Is this money well spent on provider rewards if it is not accompanied by some incentive for patients to take responsibility for their health?

Under existing law, providers might be subject to penalties if they are deemed to have provided “remuneration” to Medicare beneficiaries to influence the beneficiary’s choice of provider. There is concern among those forming ACOs that laws of this type tie their hands in designing beneficiary incentives. Fortunately, waivers from these rules, if necessary, could be granted under the health law’s general authority for the new Center for Medicare and Medicaid Innovation, as well as in the context of the Medicare Shared Savings Program, under which much ACO activity is expected.

The task, therefore, is for the Centers for Medicare & Medicaid Services to encourage innovation in this regard. Might CMS, using one of these authorities, accept proposals from provider groups that want to use a portion of shared savings to create a beneficiary incentive pool?

Here’s an example of how such a step could have great potential for improving care and reducing costs. There is literature reporting fewer hip fractures among those who exercise. An ACO, as part of its orthopedic care management program, could attack the overall systemic costs of treating these fractures and any resulting downstream care and complications with incentives for older or at-risk patients to participate in an organized activity and balance program, and to take steps within their homes to prevent falls. If patients buy into the incentives, might it not reduce the incidence of these injuries in the first place?

In the coming days, as we await the release of the ACO regulations, we urge CMS to consider whether to welcome proposals from accountable care programs that incorporate patient, as well as provider, incentives. Likewise, as it seeks ideas about the use of its waiver authority related to such innovation, CMS should invite comment on how to harmonize laws regulating beneficiary inducements with the benefits that would accrue to the government health programs from unleashing the power of incentives for patients to address potential risk factors where they can.

The innovation that CMS has an opportunity to sponsor can step beyond rewarding revitalizing providers to offer the right care at the right time, to encouraging patients to do the right thing. There is much to be learned from the private sector’s embrace of wellness programs. The Center for Medicare and Medicaid Innovation’s work can add to this body of knowledge. CMS should devote some of this office’s resources to determining if patient incentives might be that missing link in the evolution of accountable care.

Mark Lutes is a partner in the health care practice of EpsteinBeckerGreen P.C. and is based in Washington, D.C. Joel Brill, MD is the chief medical officer of Predictive Health, LLC in Phoenix, AZ.