Individuals, businesses and nations grapple with how to measure success. Productivity metrics represent a cornerstone of economic principles used to allocate resources. In baseball, batting average and slugging percentage predict a player’s contract size. In entertainment actors are rewarded based on box office receipts while salesman live and die by performance targets and units moved.
Are similar productivity measures warranted in medicine? Clinical metrics (new visits, procedures/operations performed, relative value units) calculated by partners, administrators, and practice plans reflect a physician’s worth and compensation. The net effect is generally more but not always better care, an economic conundrum central to the health care reform debate.
Enter the Accountable Care Organization (ACO). Buried within the 2,700 pages of the Patient Protection and Affordable Care Act, ACOs will assume central positioning, altering the “volume of care” metrics game. According to the law, by 2012 physicians and hospitals will be “encouraged” to form accountable groups covering at least 5,000 patients. ACOs will basically function as HMOs, receiving per patient capitated payments to be divided among physicians and hospitals. Under such an arrangement it is hoped that volume and intensity metrics will be replaced by quality of care measures. Indeed, a planned Centers for Medicare and Medicaid Services pilot program will require that ACOs report on yet to be established metrics determined by the Health and Human Services secretary, including improvements in clinical processes/outcomes, patient experience, utilization, and costs, with benchmarks for each.
While ACOs offer one potential solution to forces that encourage potential overutilization, risks exit and will largely be borne by providers. According to Chad Mulvany, technical director at Healthcare Financial Management Association in Washington, risks in the ACO model include insurance risk (which ACO will accept high numbers of co-morbid patients in their pool?), revenue risk (poorly structured rewards for success could lead to less, not more, revenue for keeping patients well), and misalignment risk (if some private payers continue to pay fee for service while others reimburse under an ACO contract, the processes for providers and institutions will be misaligned and chaotic).
While it is unclear how the solution will unfold over the next decade, what appears certain is that current measures of clinical productivity affecting compensation will change. Volume of care metrics will be replaced by quality of care measures. What is measured and by whom, and how the data are analyzed and disseminated, are all critical questions. Physicians who see this as an opportunity rather than an impediment may well fare best.
Robert G. Uzzo, MD, FACS, holds the G. Willing “Wing” Pepper Chair in Cancer Research at Fox Chase Cancer Center, where he is Chairman of the Department of Surgery. He also is Professor of Surgery at Temple University School of Medicine in Philadelphia.