Countdown to Obamacare

"Pioneer" Health Care Plans Circle the Wagons Against Pay-for-Performance

Accountable Care Organizations were supposed to be the saviors of the health care system. But the pioneer ACOs are resisting the "accountability" part.

03.04.13 3:00 PM ET

Last week, I wrote about the Cleveland Clinic, the widely respected medical center that the Obama administration hopes will become a model for health care system delivery under the new health law.  Accountable Care Organizations are supposed to simultaneously lower costs and improve outcomes by streamlining and integrating delivery services. It's a step towards the promised land that all health care wonks dream of, where we pay for health rather than treatment.  

However, Cleveland, along with other model providers like Mayo and Intermountain, declined to become one of the "Pioneer ACOs" that the Obama administration anointed to lead the way into the new promised land.  And now, it seems, many of the institutions that did agree to join the wagon train are saying that they'll pull out if the administration tries to, well, pay them for performance rather than treatment.

One of CMS' highest profile health care delivery reform initiatives is on rocky ground as most of the Pioneer ACOs are threatening to drop out of the demonstration if CMS makes them start meeting quality measures instead of merely requiring that they report the measures, according to a letter obtained by Inside Health Policy.

The newsletter requires a subscription to read, and I don't want to steal someone else's content by summarizing, but my key takeaway is that the pioneers have found the trail a little rockier than they expected; the cost savings aren't as easy as they looked, and the health targets are harder to achieve.  

When Obamacare was being debated 2009, proponents banked heavily on its transformative potential.  When skeptics caviled about the costs, the reformers pointed out that there were all sorts of pilotss, and delivery system reforms like these ACO demonstration projects, that hadn't gotten scored as cost-saving by the Congressional Budget Office.  Of course, some of them wouldn't work, but some of them would, delivering higher quality at low cost.  They confidently expected that Obamacare would deliver even more deficit reduction than the $118 billion that the CBO had predicted.  

So far, pretty much every one of those promised improvements has underwhelmed, and the skeptics have been vindicated. The deficit-reduction has been cut in half by the need to reform some ill-advised inclusions, such as a long-term health care program whose costs exploded just outside of the 10-year budget window, and a frankly crazy plan to make everyone in America issue 1099s to any vendor who sold them goods for cash.

Of course, predictions are hard, especially about the future.  But I don't think that the skeptics just got it right by accident. If health care reform were that easy, it wouldn't be so hard.