Lately, I have been thinking a great deal about the future of long-term care for two different reasons. First, we are in the process of designing our new main office in Cherry Hill in which-we will have 90% more space to provide elder law services to seniors and those with disabilities. We expect to occupy our larger office two blocks from Ponzios Diner in September 2013. As such, we are designing our new office to anticipate what legal and social service needs seniors and those with disabilities will have in the future.
Secondly, this month, I will be the keynote speaker for the Pennsylvania Association of Personal Care Administrators during their annual meeting in State Collage, PA. The topic will be the future of long-term care.
What will long-term care look like in year 2030? A discussion should start with the Affordable Care Act (ACA), specifically, the seven pages on Accountable Care Organizations (ACO) under the health care reform law. The future of health care is an integration of all services.
What is an accountable care organization?
An ACO is a network of doctors and hospitals that shares responsibility for providing care to patients. In the new law, an ACO would agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.
An ACO would bring together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensure that all of the parts work well together.
The problem with the health care system today, including long-term care, is that patients each are getting a part of their health care separately. If people are shown that the integrated care works better, they will by it rather than assembling a patchwork of services themselves. In order for this new care model to work, ACOs will need to prove that the overall health care product they’re creating does work better and costs less in order to encourage patients and payers to buy it.
Why did Congress include ACOs in the law?
As lawmakers search for ways to reduce the national deficit, Medicare is a prime target. With baby boomers entering retirement age, the costs of the program for elderly and disabled Americans are expected to soar.
ACOs make providers jointly accountable for the health of their patients, giving them financial incentives to cooperate and save money by avoiding unnecessary tests and procedures. For ACOs to work they have to seamlessly share information. Those that save money while also meeting quality targets would keep a portion of the savings. Providers can choose to be at risk of losing money if they want to aim for a bigger reward, or they can enter the program with no risk at all.
The Department of Health and Human Services estimates that ACOs could save Medicare up to $940 million in the first four years. That’s far less than one percent of Medicare spending during that period. If the program is successful, it can be expanded by the Secretary of Health and Human Services.
How would ACOs be paid?
In Medicare’s traditional fee-for-service payment system, doctors and hospitals generally are paid more when they give patients more tests and do more procedures. That drives up costs, experts say. ACOs wouldn’t do away with fee for service but would create savings incentives by offering bonuses when providers keep costs down. Doctors and hospitals would have to meet specific quality benchmarks, focusing on prevention and carefully managing patients with chronic diseases. In other words, providers would get paid more for keeping their patients healthy and out of the hospital.
If an ACO is not able to save money, it could be stuck with the costs of investments made to improve care, such as adding new nurse care managers, and also may have to pay a penalty if they don’t meet performance and savings benchmarks. ACOs sponsored by physicians or rural providers, however, can apply to receive payments in advance to help them build the infrastructure necessary for coordinated care – a concession the Obama administration made after complaints from rural hospitals.
How would an ACO be different for patients?
Providers who are part of an ACO are required to alert their patients, who can choose to go to another doctor if they are uncomfortable participating. The patient can decline to have his data shared within the ACO. But although physicians will likely want to refer patients to hospitals and specialists within the ACO network, patients would still be free to see doctors of their choice outside the network without paying more. ACOs also will be under pressure to provide high quality care because if they don’t meet standards, they won’t get to share in any savings – and could lose their contracts.
Integration of all health care services is the future. You may have recently read that Cooper Health System in South Jersey recently purchased a minority interest in Amerihealth. Why? Cooper Health System wants to form its own ACO. This is only the beginning of consolidation as the future of health care, including long-term care, begins to take shape.