“Together, the Medicare Payment Advisory Commission … and [Elliot] Fisher provided the impetus for the current concept and interest in acos.”

Medpac meeting, November 9, 2006, http://www.medpac.gov/transcripts/1108_1109_medpac.final.pdf, accessed February 5, 2011, P 311

Same diagnosis: FFS and “fragmentation”

• Same diagnosis: FFS and “fragmentation”

• Same prescription: Reverse fee-for-service incentives, shift insurance risk to doctors; “protect” patients with report cards; consolidate clinics and hospitals into much larger entities

• Shared poster child: Kaiser Permanente

• Same vague definition of HMO/ACO: network of providers “held accountable” for cost via capitation and quality via report cards

• Each associated with one “father”(Ellwood; Fisher);

• Neither was demanded by patients and doctors; each initiated by Congress and a few state legislatures

In the following quotes from papers promoting HMOs (Ellwood et al.) and ACOs (Fisher and McClellan), note these similarities in their diagnosis of the problem:

• In the following quotes from papers promoting HMOs (Ellwood et al.) and ACOs (Fisher and McClellan), note these similarities in their diagnosis of the problem:

• * the fee-for-service payment method is the fundamental cause of health care inflation;

• * the medical sector is “fragmented.”

“Medical care is presently provided by doctors, hospitals, clinics, visiting nurses, laboratories, and drug stores…. It is the way health services are organized … that needs changing. Health services are delivered by units that are both too small and too specialized.” [ P 292] [Cont.]

• “Medical care is presently provided by doctors, hospitals, clinics, visiting nurses, laboratories, and drug stores…. It is the way health services are organized … that needs changing. Health services are delivered by units that are both too small and too specialized.” [ P 292] [Cont.]

“The way that health care is financed today works against the consumer’s interest. Since payment is based upon the number of physician contacts and hospital days used, the greater the number of contacts and days used, the greater the reward to the provider.” [P 292]

• “The way that health care is financed today works against the consumer’s interest. Since payment is based upon the number of physician contacts and hospital days used, the greater the number of contacts and days used, the greater the reward to the provider.” [P 292]

• Paul M Ellwood, Jr., et al., “Health maintenance strategy,” Medical Care 1971;9:291-298

“To overcome the current system’s perverse incentives and fragmentation, providers need to become accountable for the overall quality and cost of care for the populations they serve.”

• “To overcome the current system’s perverse incentives and fragmentation, providers need to become accountable for the overall quality and cost of care for the populations they serve.”

• Elliot Fisher et al., “Fostering accountable health care: Moving forward in Medicare,” Health Affairs 2009;28:w219-231, w220 (Published online 27 January 2009)

“The current system, based on volume and intensity, does not disincentivize, but rather pays more for, overuse and fragmentation. Providers note that current payment systems undermine efforts to invest money and effort in delivery-system improvements that can sustainably reduce costs.”

• “The current system, based on volume and intensity, does not disincentivize, but rather pays more for, overuse and fragmentation. Providers note that current payment systems undermine efforts to invest money and effort in delivery-system improvements that can sustainably reduce costs.”

• Mark McClellan et al., “A national strategy to put accountable care into practice,” Health Affairs 2010;29:982-990, 982.

In the following quotations from Ellwood’s 1971 paper, the Jackson Hole Group’s 1992 paper, and McClellan-Fisher’s 2010 paper, note these similarities in the papers’ description of the solution:

• In the following quotations from Ellwood’s 1971 paper, the Jackson Hole Group’s 1992 paper, and McClellan-Fisher’s 2010 paper, note these similarities in the papers’ description of the solution:

• * The HMO/ACO is vaguely defined (no particular organizational structure is required);

• * the entity will be “accountable” for cost via capitation and quality via report cards; and

• * the entity must provide all necessary medical services to a defined population (aka “enrollees”).

“Services would be purchased annually from … Health Maintenance Contracts (capitation)…. [ P 291][T]he … HMO … agrees to provide comprehensive health maintenance services to its enrollees in exchange for a fixed annual fee…. The economic incentives of both the provider and the consumer are aligned…. [P 295] Federal concern would focus on the performance of the HMO, not on its organizational structure. [P 296]. A performance reporting system … would be … installed….” [P 297]

• “Services would be purchased annually from … Health Maintenance Contracts (capitation)…. [ P 291][T]he … HMO … agrees to provide comprehensive health maintenance services to its enrollees in exchange for a fixed annual fee…. The economic incentives of both the provider and the consumer are aligned…. [P 295] Federal concern would focus on the performance of the HMO, not on its organizational structure. [P 296]. A performance reporting system … would be … installed….” [P 297]

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