Reforming Healthcare Delivery - Accountable Cardiovascular Care in a New Era

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Disclosure:This manuscript is based on the author's November 11, 2009 presentation in The Distinguished Lecturer Series sponsored by the Dayton Heart Institute of the Good Samaritan Hospital.

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With bills in development in both the House and the Senate, at present the precise nature of healthcare reform remains uncertain. What is certain is that reform is imminent. Dramatic cuts included in the final Physician Payment Rule from the Centers for Medicare and Medicaid Services (CMS) are looming as well. This all adds up to major change in the way America’s cardiologists will practice in the future, and the way in which cardiovascular care will need to be organized to thrive and deliver quality patient care.

The American College of Cardiology (ACC) remains committed to working with legislators and the Obama administration to ensure the College’s six principles for healthcare reform are included in final legislation:

  • universal coverage;
  • coverage through an expansion of both public (Medicare, Medicaid, Veterans’ Affairs [VA], Civilian Health And Medical Program of the Uniformed Services [CHAMPUS]) and private (pluralistic) programs;
  • focus on patient value—transparent, high-quality, cost-effective, continuous care;
  • emphasis on professionalism and the foundation of an effective partnership with empowered patients;
  • co-ordination across sources and sites of care; and
  • payment reforms that reward quality and ensure value.

While coverage and financing are critical, healthcare providers can have the most impact on the last four principles, which are focused on delivery system improvement and patient empowerment. In addition, a renewed focus on measurable health outcomes, a reduction in legal and defensive medicine costs, a promotion of clinical comparative effectiveness, and a focus on projected workforce needs must be part of any overall reform.

Likewise, the ACC remains committed to payment reform that rewards quality of care and best practices rather than just the number of patient contacts or volume of services provided. We have a perverse payment system that fails to reward adequately those who endeavor to provide total patient care, consultation, prevention, and evidence-based disease management. Provider payment systems must be re-designed with the interests of the patients in mind.

Patients and physicians have not been well served by the cost and volume controls that occurred during the past decade. The current escalation of healthcare costs is not sustainable. There are savings that can translate into a better system of care that benefits patients and physicians while decreasing duplication and improving quality and co-ordination of care.

The ACC supports payment reforms for improved co-ordination of care, team-based care delivery, and the appropriate use of tests and procedures. There should be disincentives for care providers—and patients themselves—who over- or under-use tests and technologies. In addition, we can reduce the rate of increased spending by rewarding value-based care. We can offset any losses through the added payments we receive when more of this country is insured and when incentives for quality system development are in place. The ACC also supports the patient-centered medical home idea, as long as it is recognized that specialty-centered medical homes are necessary for some patients and practices.

The right amount of care and how best to deliver it is uncertain. In fact, clinical uncertainty is the likely source of a significant amount of observed geographical variation in resource use and quality of care.1,2 Medical care is a point-of-care interaction between the patient and a clinician or clinical team. It is a blend of the observations, fears, anticipations, and concerns of the patient balanced by the expertise and experience of the clinician and clinical team. The need for joint decision-making adds a new dimension to balancing the art and science of medicine, as the best clinicians transition to some extent ‘from god to guide.’

At its best, healthcare is spectacular in the US, and in cardiovascular care, which has experienced a 27% reduction in morbidity and mortality over the last decade,3 we see amazing progress and innovation. At its worst, healthcare in this country can include inappropriate care because of knowledge-based deficiencies, poor care co-ordination, and unacceptable and inefficient use of resources—infrequently but unfortunately sometimes for overt personal financial gain. In truth, it is easier to identify blatant over-use of resources than errors of omission: under-use of appropriate care is a serious problem as well as over-use and misuse, making resource use and quality variation more complex than often considered. The ACC believes this requires consideration of socioeconomic, medical risk, and patient expectation factors as well. The goal for achieving the best healthcare, or ‘right care,’ must therefore consider the best evidence, the right setting and professional skill sets, appropriate co-ordination among multiple care-givers and sites of care, and patient preferences and individual patient characteristics, including genetics, lifestyle preferences, health literacy, and gender, race, and ethnicity. The ACC/American Heart Association Clinical Guidelines and the ACC’s Appropriate Use Criteria are designed to determine the right care, whereas ACC registries are designed to measure process and outcomes as steps toward delivering best care. These tools improve quality and efficiency and are not volume targets.

Integrated healthcare delivery is the current favored approach to aligning resource use and cost, typically implying co-ordination of care delivery between physicians and other professionals, hospitals, and often insurers, usually built around interoperable health information technology and decision support systems. Accountable care organizations (ACOs), a concept included in the healthcare reform legislation before both the House and the Senate, propose to translate the efficiencies and lessons learned from large integrated systems and apply them to non-integrated practices and communities. ACOs would need to be able to organize care using payment systems and delivery models that reward improved quality, efficiency, co-ordination, and patient and provider satisfaction—a daunting set of challenges. The ACO design could be real or virtual integration of local delivery providers.

Most integrated systems have developed over time under unique circumstances, but they represent only about 15% of the total delivery of healthcare. Although there are some highly visible and high-quality integrated systems, we do not actually know whether integrated systems are generally better at providing greater quality or more efficient care than many other—typically smaller—quality-focused practices in the country. In late June 2009, the Medicare Payments Advisory Commission4 suggested that the definition of an ACO should include an array of possible models, including large integrated systems that already exist, as well as academic medical centers, independent practice associations, and physician-hospital organizations. Virtual integration might occur around voluntary multispecialty practice alignments using interoperable health information technology (IT) and registries for care measurement and quality feedback. However, outside the integrated systems, government antitrust regulations have made it difficult or even illegal for practices and hospitals to co-ordinate care and quality. Virtual integration would likely require some antitrust relief.

Because most of the care is delivered by small groups of physicians who are not connected, the challenge is to allow trials of ACOs initially to continue using fee-for-service payments while adding new financial incentives or gain-sharing options for savings, efficiencies, and/or improvements in quality or outcomes achieved across a geography, population, and time-frame. Another option might be to have existing integrated systems try to expand their networks among non-integrated communities of physicians, other providers, and hospitals.

These kinds of new structure may be complicated, and clinicians, patients, and payers should have input about their design and function. For example, the ACO models should reward providers for reducing unnecessary and discretionary services and for measurably improving quality, but not for denying necessary care. Members of an ACO should not be at risk for costs they cannot control. There will also need to be an outlier adjustment that protects an ACO from unforeseen events, or few clinicians would likely risk participating.

The Senate Finance Committee5 recommended that practices should be allowed in 2012 to come together as ACOs to improve quality and efficiency and reduce cost. There are several criteria listed for forming such new networks:

  • a two-year participation contract;
  • a formal legal structure;
  • inclusion of primary care physicians with at least 5,000 patients;
  • a list of primary care physicians and subspecialty physicians who are involved provided to the CMS;
  • contracts with care groups of specialty physicians outside the ACO;
  • management and leadership structure for joint decision-making; and
  • defined processes for promoting evidence-based medicine and reporting on quality, cost reduction measures, and co-ordinated care.

An ACO could earn incentive payments by reporting yearly on quality indicators, clinical processes, patient satisfaction, utilization, cost, and outcomes. The CMS would assign patients to an ACO based on their primary care physician’s affiliation. CMS would then permit patients to move from one ACO to another. The cost of moving and attribution of care to the various ACOs is unclear. In this structure, initially physicians would be paid on a fee-for-service system, although the proposal from the Senate is expected to evolve toward a new strategy, such as bundling of episodes of care or capitation.

However, capitation has historically been mainly a cost-control mechanism, and this will continue unless future models are accompanied by registry-based measurement and continuous quality improvement systems that can effectively protect against under-treatment and/or less than appropriate care, and closely monitor patient and physician satisfaction. Without these protections, capitation is no more a quality of service model than the fee-for-service system. In fact, as stated, it is far easier to measure the use of services provided than it is to measure the lack of services that should have been provided.

The current fee-for-service system, in turn, has experienced severe cuts during the past 10 years and inadequate adjustments even for primary care providers. The cuts in the CMS final Physician Payment Rule for 2010 are draconian. The status quo, therefore, is not a winner for efficiency, quality, co-ordination, or reimbursement. The profession needs to make sure on behalf of both patients and physicians that any proposed delivery and payment reform changes are achievable, patient-centered, evidence-based, and likely to promote patient satisfaction, practice viability, and professionalism. There needs to be legislative language that permits experimentation of various ACO models around these values and goals.

If an effective ACO model is developed, an actuarially sound baseline of expected costs would need to be determined for the preceding three years’ cost for each beneficiary for both Medicare Parts A and B to track performance against a credible cost target. To risk-adjust such a target fairly, a denominator of patients >5,000 will likely be necessary. The current articulated goal would be to reduce costs by 2% less than the previous benchmark period, with the ACO receiving 50% of the savings beyond the 2% budget-reduction target. This point is purely arbitrary and in the current Medicare Demonstration Project6 resulted in a 60% failure in cost reduction despite a 96% success rate in meeting quality measures. A better goal would be to improve risk-adjusted quality and efficient care in all practice settings and reward ACOs for having met those quality targets as well.

What is also unclear about the ACO model is what will incentivize participation and reward quality improvement when system improvements have wrung much of the current waste out of the system. Ideally, this is what should happen, but the success of the ACO model, as currently considered, will eliminate most of its future payment incentives. On the basis of a decade of flat payment and disincentives for quality, the flawed sustainable growth rate (SGR) formula experience correctly raises concerns about long-term implications of an ACO experiment that is not carefully designed. One possible goal might be to convert long-term ACO rewards to gain-sharing around annualized network-produced reductions in cost increases compared with annual medical inflation or actuarialized expected cost projections.

In this scenario, if regional healthcare cost inflation were to increase by 5% above the gross domestic product (or expected cost increases), and a given participating network holds its cost inflation to perhaps 3% during the same time period, it might keep 80% of the ‘gain-share.’ A second ACO reward system also needs to be developed around parallel improvements in clinical outcomes— success and incentives here should not just be defined around relative cost improvements. However, no long-term strategy has been proposed for ACO incentives beyond going after the current system inefficiencies, which is a problem. Given the SGR experience, ‘trust us’ will not suffice as a strategy. The profession needs to be at the table as these ideas are developed.

It is clear that healthcare delivery needs to become more efficient, promote continuous quality improvement, and foster better co-ordination of care. Efforts that promote these tactics within a community or region are needed and are worthy of focused consideration. However, there are many unanswered questions related to today’s new ideas about delivery system and payment reform, including:

  • attribution of services when the patient moves from one ACO to another;
  • setting benchmark cost targets;
  • re-calculating the baseline cost in subsequent years;
  • adding quality improvement as an additional component of the reward system;
  • addressing legal issues around the creation of a collaborative organization to improve quality of care in a virtual integrated network;
  • determining the proper size for an ACO to be sure there is an adequate patient base for legitimate risk adjustment and cost targeting; and
  • determining what variations of the model will be necessary in different geographies and circumstances.

For patients, the structure may look initially attractive, but some questions should be considered before widespread acceptance is promoted:

  • will improved quality, efficiency, and co-ordination of care occur?
  • will there be real patient choice of ACOs in a given geographical region?
  • will patients keep access to their primary care physician or their specialist(s) of choice?
  • should patients be concerned about the potential rationing of care and stifling of innovation? and
  • if ACOs become conflicted as future cost controls are put in place, will the decreases in benefits or care be appropriate?

For physicians, there needs to be a different set of pertinent questions that should be considered before entering into this new world. A few such questions are as follows:

  • can we effectively organize virtual networks across competitive practices?
  • can we hold those networks together as we collectively work to improve quality and efficiency?
  • what kinds of governance structure will be necessary?
  • will healthcare information technology deliver on the expectations of improved quality, efficient use of resources, and co-ordination of care?
  • are we willing to accept that the goals are worth pursuing, despite the likely difficulties in successfully transitioning from the current delivery structure to the new structures? and
  • are longer-term incentives enough to warrant the risk of transitioning to new structures?

Physicians and patients must work together to establish the correct operating principles of an ACO or variations of that concept. Because most healthcare is delivered in the ambulatory setting, it remains to be determined whether the ACOs are best developed in parallel among physician practices and hospitals or as partnerships between hospitals and physicians. Many are concerned that hospital-led ACOs will force physician employment by hospitals, with possible unintended negative consequences for physicians, hospitals, and patients.

Patients, physicians, other providers, and payers are in a better position to guide the redesign of the healthcare delivery system than government agencies, policy organizations, or elected officials, no matter how well intended. Therefore, they need to be provided with the tools, the latitude, and the support to participate centrally in system redesign. Experimentation should be encouraged.

Moving forward, the ACC is committed to furthering quality applications within the clinical setting and expanding our guidelines, performance measures, appropriate use criteria, and the National Cardiovascular Data Registry. The new PINNACLE Network of outpatient registries and practice tools will soon become a critical infrastructure of real or virtual cardiovascular integration necessary to adapt to new payment and delivery concepts while protecting quality, patient safety, and patient-centered care best practices. This is what our members expect and what the public deserves.

The ACC has developed a series of action plans in areas where we believe we can make major contributions in both cardiovascular care and overall system reform. The plans focus on reducing cardiovascular-related hospital readmission rates, limiting inappropriate imaging, reducing geographical variations in care, encouraging adherence to guidelines, partnering on patient-centered medical home models, ensuring transparency and professionalism, testing payment models that reward quality, and increasing primary and secondary prevention through medication adherence and lifestyle choices. The ACC firmly believes that carefully crafted partnerships among patients, CMS, Congress, the Obama Administration, willing professional societies, and patient-centered interest groups are critical to enacting real reforms and expediting the progress needed. Each of the ACC’s principles and proposed pilots is designed to move the cardiovascular community—and the nation as a whole— even closer to ensuring the right care, to the right patient, at the right time.



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  2. Fisher ES, Wennberg DE, Stukel TA, et al., The implications of regional variations in Medicare spending. Part 2: health outcomes and satisfaction with care, Ann Intern Med, 2003;138:288–98.
  3. Cardiovascular Disease Statistics, American Heart Association, 2009. Available at: (accessed October 26, 2009).
  4. Medicare Physician Group Practice Demonstration: Physician Groups Continue to Improve Quality and Generate Savings Under Medicare Physician Pay for Performance Demonstration, Centers for Medicare and Medicaid Services, 2008. Available at: www.cms. (accessed October 26, 2009).
  5. Description of Policy Options—Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs, Senate Finance Committee, April 29, 2009. Available at: 042809%20Health%20Care%20Description%20of%20Policy%20O ption.pdf (accessed October 26, 2009).
  6. Medicare Physician Group Practice Demonstration: Physician Groups Continue to Improve Quality and Generate Savings Under Medicare Physician Pay for Performance Demonstration, Centers for Medicare and Medicaid Services, 2008. Availabke at: (accessed October 26, 2009).