Dartmouth-Hitchcock Medical Center has withdrawn from the Pioneer Accountable Care Organization Model, which requires participating medical centers to emphasize quality of care rather than fee for service care, DHMC director of external relations Rick Adams and DHMC director of value-based reimbursement modelsLynn Guillette said.
DHMC was one of the 32 original Pioneer ACO members, of which only 19 remain. Under ACO models, health care centers scrutinized services provided, with the aim of providing fewer unnecessary procedures to patients and instead focus on the quality of health care. The largest benefit of ACO models is that they give health care providers an incentive to shift from service for fee procedures, economics and public policy professor Charles Wheelan said.
“ACO models are a way to make sure the patient is getting the right care — not more care,” Wheelan said.
The ACO model allows health care providers and those who will cover the cost of the procedure to split the cost of care based on evaluations of quality benchmarks the health care provider is expected to meet, Wheelan added.
“The theory behind ACO models has the potential to reduce cost and improve health care for patients,” Wheelan said.
But ACO models can fail because they pay medical facilities to reduce unnecessary procedures, rather than rewarding them for positive patient outcomes, Wheelan said.
In this case, Guillette and Adams said that the financial model behind Pioneer was not suitable for DHMC. Guillette said that while the Pioneer ACO model has proven beneficial for other health care providers, DHMC could not sustain the financial cost of providing care under this ACO.
“I think the Pioneer ACO model financial model is just flawed,” she said. “We as an organization just cannot financially sustain that.”
Even though DHMC was awarded a bonus from Pioneer in 2012, projections showed that DHMC would have to pay about $2 to $3 million in penalties for not meeting the ACO money-saving benchmark this year, Adams said.
The decision to withdraw from Pioneer ACO was not linked to budget issues at DHMC, Adams said. Last month, the Geisel School of Medicine announced a bundle of policies aimed at reducing a budget deficit.
Adams stressed that DHMC still supports ACO models in general — but Pioneer in particular, he said, had a flawed financial structure.
“DHMC believes in a sustainable health system based on three things — community health systems, the idea of value to patients and the idea of ACO models,” Adams said.
When the Pioneer ACO Model was proposed in 2011, DHMC applied because the hospital had an interest in participating in affordable care models, Adams said. Indeed, DHMC has had a strong connection to ACOs since their creation in 2006 when Elliot Fisher, a doctor at DHMC, became the first to coin the term “ACO” in one of his own research papers, Adams said.
DHMC’s long time commitment to quality and affordable care to patients was not awarded under the ACO Pioneer model, Guillette said.
But Pioneer itself was flawed, Adams said, because it did not take into account DHMC’s particular strengths and constraints — the model was too generalized.
Under the model, DHMC was saving some money and achieving quality care goals — in fact, DHMC met 33 quality-of-care benchmarks set by the Pioneer ACO — but still had to pay $3.7 million in penalty fees for not meeting this ACO’s financial benchmarks, he said.
The Pioneer ACO’s regulations were not tailored for individual institutions and local or regional conditions, Adams said, and he noted that the conditions for fines were not clear beforehand.
“Just like it’s easier for a 12-minute mile runner to cut off a lot of time and harder for a five-minute mile runner to cut off a lot of time, it is harder for DHMC to cut off the amount spent on procedures because we were already doing well,” Adams said.
In particular, Adams said that DHMC is a low utilized facility, meaning that DHMC does very little radiology, X-rays and other treatments that are often associated with fee-for-services costs.
What happened over time was that DHMC was being judged on standards based off of systems that had a lot of room for improvement, Adams said.
Adams added that DHMC made recommendations to Center for Medicare and Medicaid Services to improve the model but saw little change in the evaluation process.
In September, when DHMC notified the Center for Medicare and Medicaid Services that they would be withdrawing from the Pioneer ACO model, they were invited to join the Next Generation ACO model, also run by CMS. The benchmarks are more specific and flexible for different medical facilities, Adams said.
DHMC has not signed contracts for the model because the details of the contract are still unclear.
Guillette said that the Next Generation model assesses local and regional conditions that could prove to be beneficial for both the patient and DHMC.
“We remain cautiously optimistic that the [Next Generation] model evolves into what we intended to be,” Guillette said.
