How would accountable care organizations impact dermatology?

July 1, 2011

In my last editorial, I expressed mystification about what exactly was being "reformed" by the passage of the 2,700-page "Patient Protection and Affordable Care Act." Finally, a limited number of details about the provisions of this act are finally coming to light. The latest is the Accountable Care Organizations (ACOs), which represents one of the first proposals to provide initiatives to reform healthcare delivery.

Key Points

In the three months that have passed since I wrote about my concern, the only thing I can see that has changed is that finally, a limited number of details about the provisions of this act are finally coming to light. The latest is the Accountable Care Organizations (ACOs), which represents one of the first proposals to provide initiatives to reform healthcare delivery.

Defining goals

With that in mind, I attempted to find out more about what an ACO will look like, how it will function and what impact it may have on the delivery of dermatologic services. What I have learned is that ACOs represent a newly proposed payment model that will encourage physicians and hospitals to work together to improve healthcare while reducing costs. However puzzling it may be, the proposed rule states that "a hospital would not necessarily have to be included."

Each ACO would manage the healthcare of at least 5,000 patients for three years and be required to meet 65 quality measures in various areas. If the ACO succeeds in meeting the requirements while at the same time reducing the cost of providing care, they may share in the savings that result.

The CMS model estimates that the ACOs will receive $800 million in bonuses over a three-year period. At the same time, this model estimates that they will also be assessed about $40 million in penalties during that same period, presumably for failing to meet the established level of care. An estimated 1.5 to 4 million Medicare patients will begin receiving their healthcare through an ACO once this provision goes into effect on Jan. 1, 2012.

One of the greatest concerns is that many small medical practices, which characterize most private dermatology practices, may find difficulty in banding together with larger primary care practices or hospitals to form an ACO. If a small practice isn't already participating in such an arrangement, it may be extremely difficult to establish one from scratch, especially given the high start-up costs.

Future unclear

I believe there is a consensus opinion among physicians that a new healthcare delivery system that serves to improve care of the patient while reducing costs (but not decreasing the quality or access to care or increasing the bureaucracy or administrative hurdles required to provide that care) would be favorably received.

Based on prior experience, however, it remains to be seen if those ideals can be met under the ACO model. And where dermatologists fit into this system has yet to be defined.

Ronald G. Wheeland, M.D., is chief of dermatologic surgery, Department of Dermatology, University of Missouri, Columbia, Mo.