Vermont's Foray Into Accountable Care Organizations: An Update From The Commonwealth Fund

The Disease Management Care Blog used to make grape wine. Its stand of Foch vines was well suited to the northeast U.S. climate and reliably yielded an adequate if unrefined extract. It was great fun to dump juice, crushed skins, stems and leaves into a large bin every August, measure specific gravity with a hydrometer, guesstimate additional amounts of water and sugar, add the yeast and stand back. Once the foamy fementation began, it filled the DMCB's house with a sweet thick odor. The smell was disquieting, but the DMCB calmed the spouse by reminding her that the scent was evidence of God's angels at work. What else could account for miracle of trading carbon dioxide for ethanol?

The same approach of mixing, patience and reliance on divine intervention may be in store for Vermont's Accountable Care Organization Pilots. According to this Commonwealth Fund (CWF) report, the three provider organizations are hard at work with preparations in an initiative that, unlike any other multi-payer ACO and/or PCMH pilot anywhere, involves Medicare.

This CWF update is worth a read. Since readers may not have the time or patience to do that, the DMCB, armed with a Sunday afternoon Pinot, is at your service by cutting through the admino-speak with this handy if vinophilic summary of what these Green Mountain State ACO-wannabe provider organizations are planning. DMCB editorializing is italicized.

The Grapes: The main ingredient is lots of primary care 'exemplified by the patient centered medical home' (PCMH). Reading between the lines, the DMCB suspects the pilots may not be able to insist that every participating PCP meets criteria for a PCMH.

How will ACOs help primary care physicians not rely on emergency rooms and specialists to off-load the work of complex patients? Foch grapes do not a Chardonnay make.

The Sugar: This consists of 'shared savings' pools with the necessary legal cover to distribute payments to the providers. The term 'shared savings' is repeatedly used, making the DMCB think that reduced claims expense is the underlying business model.

In reading the report, the paranoid DMCB gets the distinct impression that the "shared savings" are really intended to build a better - and bigger - health care delivery system. Yet, if the PCMH does its job, the ACOs will need smaller hospitals and fewer specialists. If money doesn't get taken out of the system, how will the ACO business model succeed?

Water: This is a patient population of 'sufficient size' from multiple payers, including Medicare, to support performance measurement and stability of expenditure projections. The authors suggest an ACO needs 70% of patients in a shared savings pool to make this work.

That's newsworthy and should be noted by other ACO wannabes. Yet, if this key ingredient is contaminated by an unwieldy, inflexible and erratic Medicare program, the result will be vinegar.

Hydrometer: Measurement coupled with information technology with "process improvement capabilities" to improve performance and achieve financial and quality goals.

The DMCB can't tell how the planners intend to format and reconcile claims data from multiple payers and then mix it in with clinical data from pharmacy and clinical electronic records. More to follow.......

Yeast: leadership involving physicians and hospital CEOs.

This is a good point, but the DMCB cautions that being a physician leader or CEO may not automatically qualify anyone for running a risk-bearing ACO. For that, an ACO may need an insurance executive or someone from the disease management industry.

While the DMCB's use of the wine allegory is a little forced, it's not the first time. The point, however, is that while the ingredients are pretty standard, the DMCB learned through trial and error that the outcome of wine-making is far from certain.

The same can be said of ACOs.