Care Delivery Doesn't Require a Radical Makeover

Think of the Patient Protection and Affordable Care Act (PPACA) as legislation in two parts. The first part puts in place insurance reform. Its highly contentious features, including medical loss ratio provisions and the establishment of insurance exchanges, extend government control over the insurance industry.

The second—and much smaller—part initiates reform of the care delivery system. The centerpiece provision, originally just a few pages in length and now several hundred in follow-up rules, formalizes the creation of accountable care organizations (ACOs).

Few would argue that the care delivery system as it currently functions creates the necessary value to sustain the long-term health of the U.S. population. More aptly, value, in terms of costs, quality and outcome, does not even exist as a metric that stakeholders uniformly agree upon.

ACOs, PPACA's authors believe, establish critical functions that occur only in part or not at all: continuum of care, seamless integration, and risk sharing across providers. Consider its propagation the manifest destiny of the Kaiser model.

Dawn Holcombe, writing in Perspectives, disputes the ACO vision. She supports the counterargument that ACOs would accomplish little more than forced consolidation of hospitals and physician practices. Applying her extensive experience in community oncology, she advocates a simpler reform process that emphasizes collaboration and basic information flow between payers and physician practices.

Hospitals, because of their vast inefficiencies and top-line incentives, would make terrible partners. In the case of oncology, they account for 80% of the costs.

The key, Dawn contends, is to promote the entrepreneurial efficiencies of community practices, not destroy them.

Read "Care Delivery Doesn't Require a Radical Makeover" here.