A Modified “Golden Rule” for Health Care Organizations

Abstract

Partners HealthCare (Partners) is an integrated health care delivery system in Boston, Massachusetts, that includes 2 large academic medical centers—Massachusetts General Hospital and Brigham and Women's Hospital—with more than 6000 physicians, including more than 1200 primary care physicians. In November 2011, Partners leadership agreed to become a Pioneer Accountable Care Organization (ACO), placing a significant fraction of their revenue at risk in a contract with the Centers for Medicare and Medicaid Services (CMS) that encourages them to hold increases in medical expense trend below the national average. Given our negative experiences with capitation in the 1990s, the decision to participate was largely based on 4 factors that differentiated the current environment and agreement terms from our prior experience. First, efforts to reduce health care spending as a percentage of gross domestic product are likely to persist. Unlike in the 1990s, the extent to which current health care expenditures are crowding out other important programs is unsustainable. Accordingly, state and federal governments are taking a proactive role in cost-containment efforts. Second, the preservation of patient choice (as opposed to the closed networks of the 1990s) somewhat mitigates the “physician as gatekeeper” tension that contributed to the demise of capitation. Of course, this new twist also makes taking financial risk less appealing, but under the right conditions, the trade-off seems reasonable. Third, the threshold for achieving shared savings is to increase spending at a rate that is less than the national average. Such a moderate approach seems more reasonable than the steep discounts negotiated by commercial payers in the 1990s and is consistent with the scale and pace of change that will be required for success. Finally, Partners is better equipped to care for populations of patients today than we were in the 1990s. A universally adopted electronic health record, improved communication and notification tools, and real-time data tracking of patients as they move within our organization permit more precise and proactive management of quality and costs. In addition, we are better able to provide feedback on health care professional–specific variation to our physicians as part of our efforts to promote continuous improvement. What do we plan to do differently as a Pioneer ACO? Our plan includes 3 distinct but mutually reinforcing activities: (1) managing how financial incentives flow through our system, (2) implementing programmatic initiatives for managing cost and quality trends for our primary care population, and (3) demonstrating value to other ACOs that are referring their patients to us.