The Fight for Accountable Care

The medical community and the Department of Health and Human Services are currently embroiled in a fight over the makeup of regulations that will frame the Accountable Care Organization model for Medicare. If this were the NFL players’ union negotiations, observers would describe the parties as being “far apart.” In fact, The Wall Street Journal went so far over the weekend to editorialize on the “Accountable Care Fiasco.”

There are many ways to view this dispute between the health industry and its regulator. It’s a fair argument to say that the 429-page, proposed ACO rule represents an aggressive effort by the government to micromanage ACOs as they develop. Over-regulate ACOs at the beginning, critics argue, and they will never voluntarily materialize.

One can also argue that the proposed rules are simply an early attempt by regulators who are more familiar with the regulation of fee-for-service health care than the regulations of integrated-care delivery systems. The Obama administration, which made ACOs a cornerstone of its Medicare cost- containment strategy, will almost certainly react to the pushback that’s happening with a revised set of regulations that are more accommodating to industry’s concerns.

No matter how you view this tug of war, we can’t afford to let accountable care organizations fail to get off the ground. Developing integrated health systems that effectively deliver population-based health care is a linchpin to improving health and managing costs. This is true whether we focus on Medicare, Medicaid, or the private market. Today’s fragmented deliver system, created to treat acute care needs and fueled by fee-for-service financing models, is ill-suited to manage a population in which chronic diseases drive 75 percent of our costs.

Whether ACOs take hold in Medicare is largely a function of will power and economics. Will health care leaders be willing to risk taking their organizations into the ambiguity of an ACO model without knowing all of the details? Will payers, especially Medicare, be willing to engage industry in a collaborative process in which adjustments are made as we learn more about what’s really important?

It’s often said, and for good reason, that Medicare and Medicaid are the 500-pound gorillas that drive health-care delivery. After all, they account for the lion’s share of revenue for many hospitals and health systems. Medicare and Medicaid policies also drive decisions that affect commercial insurance programs. For that reason, we should all hope that the government and industry can settle on an approach that works reasonably well for everyone. If they can, this framework can help shape and mold private sector, ACO models.

If reasonable Medicare ACO regulations can’t be agreed upon, the private sector lift is harder, but not impossible. Most important, the health-care industry can’t afford to use the failure to come to agreement on Medicare ACO regulations as an excuse not to press forward. The stakes are too high, and the alternative–the status quo–is unsustainable.

We are at a crossroads. The leadership capacity of the health-care industry will be tested as never before. Collaboration is becoming more important than competition. Accountability and determination must replace finger pointing and denial. Innovation and risk taking must be promoted and celebrated, even when it results in well-intended failure. Most important, we need to cultivate and support health-care leaders willing to embrace ambiguity and lead through it. We won’t always have perfect information or clearly-defined rules of engagement.

Let’s hope that six months from now, we can look back on the current Medicare ACO draft regulations as nothing other than an honest attempt to move the ball forward, and that we’ve advanced the model further down the road. Whether Medicare drives the development of Accountable Care Organizations or the private sector develops accountable care organizations outside the rubric of regulation, we need to bring to life the promise of accountable care.