If you took basic economics in college, you probably remember the concept of supply and demand. It generally prevails in open market economies. Generally. But when it comes to health care in the U.S., both the supply and demand sides don’t work very well.
In health care today, providers have few incentives to supply patients low-cost, high-quality care. Though many of them do great work, overall, doctors get paid on how much they do, not on how well they do it. Hospitals, meanwhile, need to keep filling beds to get revenue, even if more efficient care can be done elsewhere.
On the demand side, patients have little information about price, quality and ways to access the best, most convenient care. They don’t know where to go for this information, and they don’t know how to talk with their health care providers about it.
Which side are we trying to fix? Both. And we’re doing it with Accountable Care Organizations (ACOs).
ACOs fundamentally change the relationship between a health insurer and a provider. Rather than stay as negotiating opponents – trying to win the price tug-of-war – we become teammates with shared goals around better, more affordable patient care.
Through an ACO, providers get paid for helping patients achieve better health in a cost-effective way. Patients have a responsibility for seeking care from providers and facilities that are held accountable for offering better quality care at a better price. In many instances, the options may be more convenient for them as well, such as in home settings.
These re-aligned incentives also help drive down avoidable expenses, such as hospital readmissions. For example, our ACO with NovaHealth in Maine reduced hospital readmissions by 56 percent for Medicare Advantage patients.
In return, hospitals can collaborate with an insurer like Aetna to help grow their membership through outreach to employers and individuals. And the doctors aligned with those systems can focus on what they do best: care for patients.
For patients, we work with them and their doctors to give them more information about how to take care of themselves in ways that can avoid unnecessary trips to the hospital or doctor, such as keeping up with their medication.
The ACO creates a connected community of care. Health insurance plans make that system work behind the scenes with data and administrative assistance, but we’re not the focus. And that’s as it should be, because people should belong to a health system, not a health insurer. Then, the health system – doctors, nurses, other specialists – will do what it does best: take care of you.