Doug Hastings Quoted on How ACOs Can Show Promise if Reform Is Implemented Properly

BNA's Health Care Daily Report

Doug Hastings, Chair of the Board of Directors and a Member of the Firm in the Health Care and Life Sciences practice in Washington, DC, was quoted in an article about how ACOs can show promise if reform is implemented properly.

The article discussed how provisions in the Patient Protection and Affordable Care Act (PPACA, Pub. L. No. 111-148) that will create ACOs show promise to successfully reform the payment and delivery of health care.

The problems facing the US health care system—fragmented care and unsustainable costs—are well known, Hastings said. The solutions require better coordinated and transparent care that uses evidence-based measures to achieve better outcomes.

ACOs can provide that solution, Hastings said in an online conference sponsored by health publisher MCOL. However, he said both the payment system and delivery system need to change together to achieve accountable care, and neither of those have happened yet. The success of an ACO depends on provider integration, as well as the relationship between providers and payers.

While PPACA calls for the creation of ACOs to transform the health care system, it does not specify who will lead the change, Hastings said.

"There's lots of open space [in the law] for parties to advance their interests," Hastings said, whether the parties include the federal government, the states, large hospital groups, or small, independent providers.

The idea behind ACOs is not new, Hastings said. In the 1990s, alternative delivery systems like HMOs and PPOs were implemented, but other payment reforms did not succeed, he said.

The limitations of earlier efforts at interpretation might lead to some political skepticism and impatience this time around, but current ACOs show promise and patience is needed, Hastings said.

"We have learned from past experience with provider integration efforts and risk contracting," Hastings said. "The implications of evidence-based medicine are more widely understood and accepted. There is greater understanding that good outcomes, patient satisfaction, and cost-efficiency are linked."

PPACA also provides specific criteria for ACOs to succeed once they are established in 2012. Under the law, ACOs will have a formal legal structure that would allow the organization to receive and distribute payments to participating providers. They also will have arrangements in place with a core group of specialist physicians, Hastings said.

"There's going to be a lot more thinking on where we go from here within the space of payment and delivery change," Hastings said.

Hastings said that providing the right incentives for providers and physicians to integrate will be a challenge for the Centers for Medicare & Medicaid Services.

"The core thinking around the existing experiment is that you won't have coordinated care unless the hospital and physician collaborate," Hastings said, so providing financial incentives, as well as reachable quality benchmarks is key.

"You want to structure them so they're achievable and real," Hastings said. The incentives and benchmarks also should allow for continued integration and improvement over time "without putting providers out of business," he said.

The private sector would benefit from greater payer-provider collaboration and acceleration of the movement to accountable care, Hastings said, but if the promise of accountable care is realized, "purchasers, payers, providers, and consumers all should benefit."

Failure to do so will put more onus on government to regulate prices on both parties and potentially micro-manage contract provisions, Hastings said.