Seizing an Opportunity from Shattered Health Reform Deal

After months of intense negotiations and compromises, landmark federal healthcare reform legislation which was nearly a done deal is now a deal undone.  Due to surprising results in a recent Massachusetts election which ended a democratic supermajority, the future of healthcare reform will now be significantly altered.  Although a broad overhaul of the healthcare system seems less likely now than in previous months, lawmakers are considering a number of strategies that could help achieve the President’s top domestic priority.

Whatever strategy Congress chooses to reform healthcare, it is essential that they continue their mission to address the major areas in need of change, including eliminating various unfair insurance practices and fixing what is broken in our current health care delivery model. Without reform the risk is real that our economy will continue on a downward spiral as sky-rocking health care costs crowd out other critical expenditures, creating the prospect that America’s world-class status will diminish over time to that of a second-rate nation. 

Part of the problem has been our reluctance to transform an antiquated fee-for-service payment model -- one that has been entrenched for decades and now threatens to bankrupt our current health care system --into a higher quality, more accountable system of care.  The existing fragmented structure makes it very difficult for patients to receive optimal care because the fee-for-service model pays physicians for treatment regardless of whether the care provided is appropriate, beneficial, or even warranted.  Additionally, within the fee-for-service model, patients are obliged to self navigate through a maze of specialists who frequently have no connection to each other, creating a climate ripe for medical errors, duplicate treatments, waste and sub-standard outcomes.

Previous healthcare reform measures offered us the opportunity to transition from this disorganized approach to one that is more affordable, comprehensive, and coordinated through the establishment of Accountable Care Organizations (ACO).  In fact, ACO’s were one part of healthcare reform nearly everyone agreed with. It is vitally important that, in their quest to transform America’s healthcare system, Congress doesn’t “throw the baby out with the bathwater.” Therefore, any future healthcare reform proposal must include the ACO model.

Accountable Care Organizations represent the next evolution of health care.  Think of it as “Health Care 3.0” – providing a system that is more accountable, affordable, efficient, innovative, and user-friendly for both patients and doctors. It will improve individual patient care by providing health services through a network of physicians who use the latest health information technology to track patient treatments and share intelligence to guide patient care decisions.  The Congressional Budget Office has estimated the savings from the currently proposed national ACO “pilot program” at $2.3 billion.

Worth noting, California’s physician groups are among the few throughout the country that have been practicing within an accountable care model for the past 20 years. In fact, the California physicians who have organized themselves into Multi-Specialty Medical Groups and Independent Practice Associations (IPA) represent the exact “Accountable Care Organization” approach that the House and Senate bills have tasked the Center for Medicare and Medicaid Services (CMS) to spread across the nation.  We know through our own successes that making ACO a permanent part of health care reform is the only way to expand access to all Californians.  ACO will accomplish this by controlling costs, adopting health information technology, and supporting integrated networks of physicians that practice “evidence based” medicine.

With the baby boomers scheduled to hit Medicare starting in 2011, and the prevalence of obesity, diabetes and heart disease skyrocketing in America, the ACO model is the best equipped to handle the intense coordination of health services required to meet the needs of these patient populations. The ACO model will also provide the infrastructure and cost containment measures needed to insure 36 million more Americans in the next decade without overwhelming our health care system.

Even though broad healthcare reform seems to be slipping away, we still have an extraordinary and unique opportunity to make a very real difference in the lives of millions of people. Congress should seriously consider the ACO experiences in California and use them as a roadmap for any healthcare reform measures proposed in the future.

Donald Crane is the President and CEO of the California Association of Physician Groups, which employs or contracts with nearly 60,000 physicians who provide care to 15 million Californians.