Poster Kids for New Health-Care Model Won't Participate in Model Program

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The administration has been pushing very hard on the Accountable Care Organization (ACO) model, which is a somewhat nebulous concept, but which is broadly supposed to save money by streamlining services and coordinating care.  It's one of the centerpieces that pro-Obamacare wonks point to as a real source of cost savings and improved services.  Exhibits A and B are usually Mayo and the Cleveland Clinic, with a few others occasionally thrown in.


However, when the administration rolled out its new ACO program last March, the poster children declined to participate, and an organization that represents large provider groups sent a letter to the Center for Medicare and Medicaid Services indicating that most of their members would not participate.  The reporting requirements, and the financial penalties for ACOs that didn't achieve savings, were simply too onerous.

In response, in May the administration created a new ACO program called Pioneer for "mature ACOs".  Unfortunately, it looks like the poster children have again refused to become a part of the demonstration project:

During the health care debate, the Mayo Clinic, the Cleveland Clinic, Geisinger Health System and Intermountain Healthcare were repeatedly touted as models for a new health care delivery system.

Now, they have something else in common: All four have declined to apply for the "Pioneer" program tailor-made by the Obama administration to reward such organizations.

"When the poster boys ask that the posters be taken down, you have a problem," says Michael Millenson, president of Health Quality Advisors LLC. The lack of participation, he says, suggests that "somebody messed up": either the government didn't make the rules appealing enough, or "when push came to shove, the big players didn't want to play by the rules."

The four health systems are considered the most promising models for "accountable care organizations," a new approach to delivering health care services that rewards doctors and hospitals for providing high-quality care to Medicare beneficiaries while keeping costs down. The ACO provision became one of the most highly anticipated elements of the health care overhaul, and providers embarked on a frenzied race to join in as quickly as possible.

ACOs--or at least some of the features that the administration envisions--may well be the future of Medicare, for all I know.  But it was always folly to point to places like the Mayo Clinic as an example of what was possible for national health care reform.


Mayo is the best in the world at what it does.  This allows it to give all sorts of rewards to doctors that compensate for not being richly remunerated gunslingers: the status of working at Mayo, the excitement of being near the cutting edge, the reward of working with other tip-top physicians.  You can no more replicate that nationwide than you could turn every college in America into Harvard.  Hell, you could build a scale replica of Harvard, put every last one of its rules and policies into effect at your new school, and hire Harvard-trained anthropologists to observe how people at Harvard act, and teach people at the new school to behave the same way.  You could put into place an elaborate system of incentives designed to reward people who act like Harvard people, and punish those that don't.  And at the end of the day, it still wouldn't be Harvard.  It probably wouldn't even be a second-tier state school.  It would be expensive performance art.

There's a clue to this in the fact that the top models for ACOs don't want to join the program.  Doing so would kill the autonomy and flexibility that makes the institution great--and that standardization would rob the institution of the status that lets it attract top talent.  It's also possible that they don't think that threats would make their doctors better at their jobs.

I've written before about the difficulty of replicating successful small-scale programs into large-scale transformation of the health care system.  It continues to be very difficult.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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