Care Coordination vs. Assumption of Risk–the Holy Grail of Health Reform

(This month’s blog post reflects testimony I made before the Iowa legislature’s Integrated Health Care Models and          Multi-Payer Delivery Systems Study Committee on November 19, 2013)

The Holy Grail of health reform is controlling costs while still providing patient access and quality care. In my opinion, the key to finding this Holy Grail is care coordination, forms of which include Patient-Centered Medical Homes (PCMHs) and Accountable Care Organizations (ACOs). A New England Journal of Medicine article summarized the comparison by saying: The PCMH model emphasizes the creation of a strong primary care foundation for the health care system, and the ACO model emphasizes the alignment of incentives and accountability for providers across the continuum of care.

As a former member of the Federal Advisory Board for Consumer Operated and Oriented Plans (health insurance co-ops), I helped write recommendations regarding integrated care, which was a legal requirement to become such a co-op. Our Commission recognized both PCHMs and ACOs as reasonable forms of integrated care.

Today and tomorrow, you will hear various explanations, descriptions, and predictions regarding these forms of care coordination. As a member of a 2007 Iowa Legislative Commission on Affordable Health Care Plans for Small Businesses and Families, I supported PCHMs; at the end of that effort in 2008, health care reform House File 2539 was enacted, recommending every Iowan become a member of a PCMH, as well as establishing the state Medical Home Advisory System Advisory Council. Medicaid also supports the concept of PCMH with their Health Home provision.

As a practicing family physician, geriatrician, and hospice medical director, whose clinic is certified by the National Center for Quality Assurance (NCQA) as a Level 3 PCMH, I have been tasked with discussing the lay-of-the-land in Iowa for private sector PCMHs.

Private sector primary care can be easily divided between physicians employed by the major hospital systems and others, which include physicians working in multi-specialty clinics, small group practices, as solos, and in affiliation with small hospitals. I reserve my comments for this second group of primary care physicians.

There is, at times, palpable tension between PCMHs and ACOs, which I would like to explore toward the end of my testimony.

For me, PCMH is, at its essence, a team approach to patient care with the patient, the primary care physician, and various members of the physician’s clinic, all striving to maintain and improve health—physically and emotionally—in a sustainable manner. There are supra-structural requirements that include electronic medical records with e-mail accessibility, a 24-hour nurse call center, and urgent care available nights and weekends. Equally, there are infrastructure requirements that include open access, which means same-day appointments for sick patients, health coaches, disease registries, patient engagement, and highly trained physicians. I will add that Paul Grundy, MD, the godfather of the national PCMH effort limited the physician role to two key functions: creating healing relationships, and dealing with difficult diagnostic and therapeutic dilemmas.  Most other functions are performed by other team members. The patient and the PCMH must both be held somewhat accountable for effort and quality.

When PCMHs are done well, studies from New Hampshire, Pennsylvania, Utah, and upstate New York overwhelming found that quality is improved and savings are obtained. Patient Centered Medical Homes can and do reduce emergency room visits, hospital admissions, hospital readmissions, imaging studies, and cross-specialty consults. From my experience, PCMHs improve diabetic control, improve mental health care, increase connectivity between patients and physicians, and increase use of early detection tests and immunizations.  My health counselors are now Certified Application Counselors (CACs) and beginning next week, will help my patients sign-up for health insurance on the Exchange. Two salient points come from evaluating these efforts in other states: one) PCMH—that is, care coordination, costs money because it is a work product, and two) the savings have outweighed the costs.

Iowa was positioned three years ago for a multi-payer PCMH pilot project but was denied when Wellmark vetoed it because of its desire to concentrate on an ACO approach. In contrast, the regional Co-Op (CoOportuity Health is the consumer operated and oriented health insurance plan for Iowa and Nebraska) has chosen to pilot a PCMH project using small physician groups. To facilitate this pilot project, six (soon seven) rural clinics have joined the Heartland Rural Physician Alliance (HRPA).

Several other clinics that are either independent or affiliated with a local hospital are also considering joining the project. The future of PCHM centers on two additional features that I do not as yet have; case managers on site for my patients with the most complicated set of diseases and a point-of-service dashboard that would allow me to view a patient’s claims data from the payer at the time of seeing the patient.

Accountable Care Organizations (ACOs) are obviously the current adaptation for health cost reform efforts. Wellmark, Medicare, Medicaid and others, in Iowa and throughout the country are engaged or planning for ACO contracting.Through care coordination, the initial goal for ACOs is to receive a portion of Shared Savings (Shared Savings is the amount saved at end of a year based on a cost projection agreement between the ACO and the insurance company or government entity like Medicare or Medicaid), with the ultimate goal being assumption of risk.  In Iowa, ACOs now include the large hospital systems, multi-specialty groups, and pure primary care groups. For example, HRPA is a part of a multi-state virtual Medicare Share Savings ACO, with its leadership in Massachusetts. The Massachusetts effort does offer a point-of-service dashboard to its primary care providers.

The tension between PCMH and ACO lies in how the division of work to accomplish care coordination effects the division of monies and the assumption of risk.

Five major questions should be asked:

  • How will the cost of PCMC care coordination be acknowledged and maintained in a Shared Savings model?
  • When risk assumption becomes the baseline contracting principle, will the same dangers that affect HMOs return?
  • Can primary care groups assume risk and will they want to?
  • If the vast majority of savings (after the costs of care coordination are taken into accounted) can be realized by primary care physicians using PCMH, why would primary care want to divide that proportion of shared savings with hospitals and specialists?
  • Most important, when shared savings are fully realized, how will the total cost of care be calculated?

For state legislators, the following questions are key:

  • Will the large hospital systems be fair to rural county health care?
  • Will there be room for independent physician groups in a Medicaid regional ACO model?

My recommendations include:

  • Allow free market to play out.
  • Guard health care in rural areas.
  • Ensure small physicians groups that meet criteria be allowed to participate in future Medicaid.
  • Emphasize care coordination and realistically negotiate risk across all parties, including providers, payers, and patients.