ACOs, Innovation and Edison

070209_edison_bulbUnited Healthcare announced this week that it will double to $50 billion annually over the next five years the value of contracts it has with doctors and hospitals based on quality and outcome measures. United is currently paying over $20 billion annually to doctors, hospitals and ancillary care providers under contractual arrangements based on value produced (i.e., quality outcomes over cost).

United’s Chief Medical Officer, Dr. Sam Ho, notes that “any bonuses will have to be earned and no longer a product of turning a page on a calendar – this is not a passing fancy for us. The United Healthcare strategy basically has expanded the accountable care concept to an accountable care platform.” Beyond just the symbolic importance, United has the largest provider network in the U.S. and already has accountable care relationships in place with over than 575 hospitals, 1,100 medical groups and 75,000 physicians.

Now, the glass-half-empty folks in healthcare are going to look at this move by United as somewhere between tyrannical, prehensile or just plain foolish, depending on individual perception, as well as position. They will argue this is just another example of non-provider influences in healthcare stealing more power from the patient. They will remind us again how HMOs failed and that ACOs are but profiteering wolves clothed in retrofitted HMO attire.

Of the two most significant challenges that ACOs face, creating financial incentives that are theoretically aligned with less care instead of more is certainly reminiscent of managed care circa 1990s – and it is a risk that must be aggressively monitored and mitigated. The other primary challenge – the inherent subjectivity of measuring patient outcomes – will have a dramatic impact on many areas of future healthcare delivery, not just provider networks and insurance contracting. It’s a challenge that will have to be effectively addressed if we ever have any hope of increasing access without bankrupting the country.

I think there are two ways to look at these challenges: in the context of the past where abundant evidence of failure exists – or in the future, where evidence of failure has not yet been created. There is a critically important difference between the two. The former is the world of intellects and philosophers, while the latter is the world of innovators and entrepreneurs. Case in point: Thomas Edison.

In failing continually to invent the light bulb Edison once remarked, “I have not failed. I’ve just found 10,000 ways that won’t work.” In similar fashion he once said, “negative results are just what I want. They’re just as valuable to me as positive results. I can never find the thing that does the job best until I find the ones that don’t.

I am not suggesting that unbridled experimentation is either wise nor prudent when the results impact human lives. But I also choose to resist the defeatist attitude among folks who become overly dependent upon history as a means of defining the future. While those who fail to learn from the past may be damned to repeat it – those who live in the past are damned to avoid innovation for fear of failure.

The underlying premise of the ACO model – financial reward for keeping people healthy, rather than reimbursement of costs for trying to make sick people well – represents a dramatic paradigm shift in thinking for this country that transcends all aspects of healthcare delivery. We should not expect it to be widely embraced in the short run. We should rightly expect a healthy amount of skepticism. And we shouldn’t be shocked if the model fails.

Those allowances, however, should not be permitted to thwart progress toward achieving expanded access to quality care, particularly for the least fortunate among us. If the failures of the past weighed most heavy on the efforts to define the future, we should not have to worry about how to make quality care available because there never would have been the advances achieved worth making available. Edison also once said that, “the doctor of the future will give no medication, but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease. ~

Will he be right?


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