ACOs and Racial and Ethnic Disparities: A Role for Community Stakeholders? Part One
A recent commentary in the Journal of the American Medical Association warns that accountable care organization (ACO) formation may unintentionally exacerbate racial and ethnic disparities in health care. As has been discussed in several posts on this blog (such as here, here, here, and here), CMS’s proposed rule to implement section 3022 of the Affordable Care Act details the requirements for forming ACOs to participate in the Medicare Shared Savings Program. With the period to comment on this proposed rule closing June 6, 2011, the time is ripe to bring these concerns to CMS’ attention, along with proposals for revisions to CMS’s proposed rule, so that the final rule takes every step possible to minimize these risks.
In “Accountable Care Organizations and Health Care Disparities,” published in JAMA on April 27, 2011, Craig Evan Pollack, MD, MHS, and Katrina Armstrong, MD, MSCA, reference the well-documented racial and ethnic disparities in health care in this country, which they describe as de facto segregation. For example, they cite various studies showing that “[b]lack and white patients tend to receive care from different clinicians who work at different hospitals and different health care systems,” and, moreover, that many (though of course not all) “hospitals that treat a large proportion of black patients appear to provide lower-quality care than hospitals that treat a larger portion of white patients.”
The authors worry that the process of forming ACOs may further concentrate patients by race and ethnicity in particular health care organizations. As they explain:
Although not explicitly selecting patients by race, ethnicity, or socioeconomic status, the current reality is that profitability in health care is strongly correlated with caring for fewer low-income patients and low-income patients are disproportionately not white. To the degree that the creation of an ACO enables wealthy practices to preferentially align with one another, this process has the potential to further concentrate wealth and racial/ethnic groups within certain ACOs.
In addition, they note that, once established, the ACO-model creates a strong incentive for an ACO to do all it can to keep its assigned beneficiaries coming back for care and from seeking care outside of the ACO, where the ACO cannot control the costs. If the ACO successfully retains its patients, and prevents movement between and among ACOs, the authors fear this incentive is “likely to accentuate racial/ethnic differences in where patients receive care.”
The authors also highlight the risk that health systems that disproportionately treat lower-income patients often will be not only separate but also unequal because they often have fewer resources to invest in improvements to value. Absent these investments, it will be harder for these ACOs to qualify for shared savings. And around the gerbil wheel we go, as racial and ethnic disparities widen.
In addition, the authors are concerned that hospitals that disproportionately care for patients from certain racial and ethnic groups may elect not to bother going through the effort to form an ACO, given the high start-up costs and because these patients’ care is too fragmented and difficult to coordinate. (But see the Medicaid ACO-model that Dr. Jeffrey Brenner is developing in Camden, New Jersey to focus resources on the 1 percent of the city’s population that accounted for 30 percent of its health costs, as discussed, here, here, and here.)
As Drs. Pollack and Armstrong summarize:
In a worst-case scenario, the cherry picking of practices in ACO formation and the process of owning patient panels will concentrate white patients within certain hospital systems that will be able to make the greatest investment in improving value and will receive the greatest benefit from the ACO arrangement. Although not intentional, this scenario leaves lower-income patients who are less likely to be white more concentrated in hospital systems that have relatively fewer financial resources and less ability to compete in a new world of accountable care.
So what can we do to reduce the risk of these unintended consequences of ACO formation?
In fairness, CMS’s proposed rule already includes some provisions that may mitigate these risks. For example, the proposed rule makes it harder for ACOs to cherry pick patients because assignment is done retrospectively (proposed Section 425.6(b)). Thus, in theory, because patient choice of provider drives assignment of beneficiaries to ACOs, patients of all races and ethnicities can choose the provider who offers the highest quality care.
Reality, of course, limits the power of patient choice, where, for example, there are few provider options in a given geographical region. The proposed rule does not address the lack of provider choice in underserved regions, although it does include certain provisions that give a preference to providers who tend to serve underserved populations. For example, the proposed rule provides a greater percentage of shared savings to, and demands a smaller percentage of shared losses from, ACOs that include a rural health clinic (RHC) or federally qualified health center (FQHC) (proposed Sections 425.7(c)(7) and 425.7(d)(6)). It also exempts ACOs from the 2 percent net savings threshold adjustment under the one-sided risk model where: all participants are physicians or physician groups; 75 percent or more of its assigned beneficiaries reside in counties outside of a metropolitan statistical area; 50 percent or more of its assigned beneficiaries were assigned based on services received from Method II critical access hospitals; or at least 50 percent of its assigned beneficiaries had at least one encounter with a participating FQHC or RHC (proposed Section 425.7(c)(4)). The proposed rule also recognizes a rural exception (proposed Section 425.5(d)(2)) to the Proposed Statement of Antitrust Enforcement Policy regarding ACOs Participating in the Medicare Shared Savings Program. These provisions may make it easier for ACOs to form and work for quality improvements in underserved areas.
The authors of the JAMA article recommend a number of additional steps CMS should take to minimize the risk of unintentionally further entrenching racial and ethnic disparities through ACO implementation. For example, they suggest that CMS consider patients from medically underserved racial and ethnic groups and individuals with low-socioeconomic status as at-risk when making the required adjustments for patient characteristics (proposed section 425.7(b)) and monitoring to be sure providers are not avoiding at-risk patients (proposed Section 425.12(b). They also suggest that it may be necessary to use incentives to make sure all populations have an opportunity to be in ACOs. To assist in evaluating the effect of ACO formation on racial and ethnic groups, they also recommend requiring ACOs to report quality indicators by race and ethnicity; studying whether there is a relationship between the distribution of patients by race and ethnicity among ACOs and quality of care received; monitoring what patient populations are excluded from this reform because their providers elect not to seek to form ACOs; and monitoring hospital and practice consolidations to “avoid patient and practice cherry picking in ACO creation . . . from a disparities [and not just an antitrust] perspective.”
Each of these suggestions warrants serious evaluation. While some, such as race-based incentives or classifications, may face steep political and legal opposition, it is difficult to conceive of a viable challenge to the measured recommendations seeking data to inform evaluation of ACO implementation. Indeed, these would serve CMS’s oft-repeated goal to make changes and improvements to the Shared Savings Program as it learns what works and what doesn’t. See 76 Fed. Reg. 19,527, 19,560 (Apr. 7, 2011).
In addition to these suggestions, I wonder if community stakeholders might also play a role in mitigating the risk of further segregation of care. Who are community stakeholders, you might ask? You’re not alone. Little appears to have been written about them. But stay tuned for Part Two of this post, which will explore this elusive player in ACO formation.
[Ed. Note: Part Two may be found here.]
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