New Marketplace
Clip
Primary Care ACO Models: Way of the Future? (04:31)

“Our competition is inertia,” says Oak Street Health Chief Medical Officer Griffin Myers. “We would welcome more people to get into the space.” Myers adds that “it’s not that scary” and encourages people to look at the Oak Street model as an opportunity. Primary care–led accountable care organizations are the ACO models that have performed the best, which should give people confidence. “Downside risk is downside risk. It’s not your life,” he adds. “If you do all the stuff that we know is right — create access to primary care, medications, and behavioral health services — you’ll go a long way to taking that downside risk off.”

For far too long we’ve looked at value and prestige as being in a big hospital, but “folks in the community taking care of people in their neighborhoods is something equally valuable and deserves equal prestige,” says Myers.

Harvard health policy expert and internist Michael McWilliams views the role of primary care–led, ACO-like practices a bit differently. Evidence shows these practices and independent physician group models generate more savings in these models because “primary care works.” It’s the primary care practices that have the greatest incentive to reduce use of just about any service, particularly hospitalizations. Voided costs are much greater than for hospitals, and the incentives are much stronger for these groups.

“It may be that what we’re seeing in terms of savings is really driven more by utilization management, which is masquerading as care coordination, those practices reducing use of post-acute care and SNFs [skilled nursing facilities] and decreasing admission rates in a much more utilization management–type fashion,” says McWilliams. “If you look at where the savings are, it’s where you would think that you could pull some crude levers to shift patients away from pricey hospital outpatient departments, or reduce admission rates, or reduce admission rates to SNFs, in particular.”

“Perhaps what Griffin has to do to convince you of his model is he can call it waste reduction,” says Harvard Health Care Initiative Chair Robert Huckman, “and the waste is the hospitalizations that he’s avoiding by engaging in this activity.”

Myers agrees with McWilliams, however. “What you must believe is that you’re preventing hospitalizations that were needed,” he says. “That being said, if what you are doing is managing illness so that people don’t have exacerbations and that’s the avoidance, I think that’s a very different question.”

“To be clear, the care coordination, care management programs that lower those rates may successfully lower those rates, but they’re costly,” adds McWilliams, “so then the net savings is a little less certain than the care coordinator who is in charge of making sure patients . . . can go home.”

From the NEJM Catalyst event Navigating Payment Reform for Providers, Payers, and Pharma, held at Harvard Business School, November 2, 2017.

More From New Marketplace
Health Care Costs - Cost Transparency Is the Main Change Needed to Support Patients in Lowering the Cost of Care

Survey Snapshot: Is Transparency the Answer?

NEJM Catalyst Insights Council members say that while transparency might be necessary, we have to change the way care is delivered.

Many Stakeholders Share Responsibility for Lowering the Cost of Care

New Marketplace Survey: Patients Lack Information to Reduce the Cost of Care

Efforts to mitigate rising health care costs have left most industry participants — patients, providers, and payers alike — frustrated at the lack of progress. While there is plenty of blame to go around, a significant open question remains: how responsible are patients for reducing costs?

Hip or Knee OA Care Management - Musculoskeletal Institute and Bundled Payment Program at Dell Medical

Bundled Payments Are Moving Upstream

Dell Medical School at The University of Texas at Austin has improved outcomes and reduced costs for musculoskeletal care with a multidisciplinary Musculoskeletal Institute and bundled payment model.

Elements of a Sustainable Complex Care Management Contract

Sustainable Financing for Complex Care Management Is Critical to a Value-Driven Health Care System

Care management should be payer-agnostic at its core.

Comparison of Certain Model Features in Blue Cross NC Blue Premier vs Next-Generation ACO Model vs BCBSMA Alternative Quality Contract

Engineering a Rapid Shift to Value-Based Payment in North Carolina: Goals and Challenges for a Commercial ACO Program

We believe North Carolina can be a model for the nation.

Small Molecule Drugs Facing Generic Competition - Orphan and Non-Orphan Drugs - Orphan Drug Act

It’s Time to Reform the Orphan Drug Act

Three proposals for improving the law to reflect 21st-century drug development practices.

Three-Part Pricing of PCSK9 Inhibitors

A New Model for Pricing Drugs of Uncertain Efficacy

Are we paying too much for new drugs before we know how well they work? This innovative pricing model proposes postponing major rewards until efficacy is established — which could help both patients and payers while still paying back investments on the most effective drugs.

what does quality measurement in health care mean

Buzz Survey Report: Addressing the Problems of Quality Measurement

An independent NEJM Catalyst report sponsored by University of Utah Health on patient involvement in quality measurement.

Average HOOS and Average KOOS for patients undergoing hip and knee replacement at CJRI

Building a “Hospital-within-Hospital” Model for Joint Replacements

The Connecticut Joint Replacement Institute has demonstrated that formerly competing independent providers can unite on a common vision to yield drastic improvements in quality, safety, and costs.

Discharge Rates and Follow-Up Internval Dashboard for One Provider at MGH Dermatology

A Successful Pilot to Improve Access by Adjusting Discharge and Follow-Up Rates

Actionable data and modest financial incentives can help motivate clinicians to adjust their behavior around scheduling follow-up appointments.

Connect

A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

Topics

Transforming Specialty Practice in Pursuit of…

Despite significant primary care reform around patient-centered medical home models, specialty care remains fragmented, with…

Bundled Payments

61 Articles

Bundled Payments Are Moving Upstream

Dell Medical School at The University of Texas at Austin has improved outcomes and reduced…

New Marketplace Survey: Patients Lack Information…

Efforts to mitigate rising health care costs have left most industry participants — patients, providers,…

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now