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Better healthcare for less money, if you can find it

A Tea Party member reaches for a pamphlet titled "The Impact of Obamacare", at a "Food for Free Minds Tea Party Rally" in Littleton, New Ham
A Tea Party member reaches for a pamphlet titled "The Impact of Obamacare", at a "Food for Free Minds Tea Party Rally" in Littleton, New Ham

By Beth Pinsker

NEW YORK (Reuters) - Consumers intrigued by the new model of accountable healthcare - which promises better-coordinated care that could save lots of money - are going to have to actively seek out participating providers.

A tenet of accountable care is better quality: doctors are paid to keep patients healthy, rather than for treating them when they are sick. Some programs even penalize providers for too many hospitalizations or not keeping overall costs down.

The changes are being driven by the Affordable Care Act, otherwise known as Obamacare, which calls for experimentation in cost-cutting for Medicare.

The narrowest definition of an accountable care organization is one that is on a list of about 250 officially participating in a Medicare pilot program. But not all are at the same stage of implementation, and there is also a growing list of others adopting the model.

What it means for patients is that they have one caregiver looking out for them.

The difference from seeing a doctor on a traditional fee-for-service plan was immediately apparent to Dennis Chitwood, a 71-year-old, retired salesman who lives in St. Louis. His current insurer, Essence Healthcare, a Medicare Advantage service provider, is an independent accountable care organization.

The first thing Chitwood noticed was that his doctor spends more time with him during appointments, and readily handed over his email address and cell phone number.

"It's like having a personal trainer or coach," says Chitwood. "Nothing seems to be too small for him to talk about."

The number of consumers touched in some way by accountable care models adds up to 43 million, or about 14 percent of the market right now, according to Niyum Gandhi, an associate partner at consulting firm Oliver Wyman. Some 230 ACOs operate under Medicare's Shared Saving Program, and 32 were in its experimental Pioneer program launched last year. The number continuing to the second year is in flux.

There are also some 50 to 60 are publicly-announced private groups, and dozens of others that follow similar methods but don't necessarily align themselves with any formal program. Overall, there were 449 ACOs and ACO-like entities in March, which is up from about 10 in 2010, according David Muhlestein, director of research for consulting firm Leavitt Partners.

MODEL NUMBERS

There is no easy way for consumers to identify accountable care groups - even the experts have a tough time tracking them - but there are a few questions you can ask to discover where your caregiver falls on the spectrum.

Find out if your primary care doctor is going to be responsible in some way for your overall care, either by meeting shared savings goals or quality benchmarks. Seek out a doctor who has a stake in keeping you healthy and who is going to shepherd you through the healthcare system, Muhlestein says.

Another marker to look for is accreditation by the National Committee for Quality Assurance, an independent non-profit group that certifies healthcare organizations. But this is not widespread, Gandhi says.

The best of today's accountable care models have changed their way of doing business and take extra steps to monitor patients and provide preventive care. For instance, CareMore, a California-based system now owned by WellPoint Inc, monitors the weight of patients who might suffer from congestive heart failure via wireless scales.

At the other end of the spectrum are those accountable healthcare organizations that have just altered their payments to insurance companies or the government.

COST SAVINGS

The attention Chitwood's doctor now provides has translated into fewer office visits because he can get a lot of his concerns answered via email - and hence fewer copays. He says his health is being managed better overall, meaning fewer illnesses.

But how much money accountable care efforts save nationally is harder to determine. First-year results of the Pioneer program released last week showed 13 of the 32 participants reported costs savings of $87.6 million in 2012, and two reported losses, while the remainder basically broke even.

Consumers may not see any direct cost savings at first, says Muhlestein, because it will take years for insurance companies and the government to pass along savings via lower premiums.

Yet, there is some evidence that just encouraging more active patient involvement lowers their costs. Studies by Judith Hibbard, a professor of health policy at the University of Oregon, show that patients who are actively engaged in their own care have achieved costs savings of 8 to 21 percent.

Jim Hansen, vice president of the Accountable Delivery System Institute of Lumeris, which provides the technological backbone for Essence Healthcare (and is owned by the same private holding company Essence Group Holdings Corp), says that the groups with which he deals are considering incentives and bonuses like gift cards for patients who make cost-saving decisions.

(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance. Editing by Lauren Young and Leslie Gevirtz)

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