For all the debate about health care reform, virtually all stakeholders agree with the overall objective: achieving better health outcomes at lower cost. Different views have emerged on how best to achieve this objective, but the vehicle favored in health care reform legislation is the accountable care organization. The legislative intent is that ACOs will have an incentive to create infrastructure and processes that lead to high-quality, efficient care.

While the goals of ACOs are laudable—reduce costs and improve quality of care through cooperation and coordination among providers—the premise underlying the ACO approach is flawed. The legislation incorporated a model that exists only as a rare exception in practice, and it assumes that this exception can be replicated widely. It ignored the risks of spreading a relatively untested model. Just as with earlier mass experiments—namely, consolidation and increased costs without the promised improvements in quality—there may be unintended consequences.

It's important to realize that there is a distinction between accountable care (the goal) and accountable care organizations (the vehicle). Accountable care means increased accountability for improving quality and lowering costs. ACOs are just one model for structuring provider organizations to deliver accountable care. In fact, accountable care can be created through multiple organizational models—real and virtual.

A Framework for Accountable Care

An effective framework for ensuring accountable care starts with primary care physicians. These physicians should be responsible for educating patients so they can make informed decisions about prevention, health maintenance, treatment compliance and minimally resource-intensive primary care treatment. These physicians also should be responsible for reassuming their traditional role as gatekeepers of patient care: use specialists as needed; collaborate with other provider organizations (social service agencies, home-health care, hospices, etc.); ensure mutual accountability; and emphasize prevention and primary care.

Hospitals should work with providers to ensure better outcomes, reduce length of stay, and manage transitions to the patient's home as well as to social agencies and other specialized organizations (hospice, home health, etc.).

Implementing key tools. Accountable care will require both providers and health care delivery organizations to demonstrate that their services deliver economic and clinical value. Providers and hospitals must address variation and inefficiencies in care delivery. A few leading health care providers, such as Geisinger Health System, Mayo Clinic and Kaiser Permanente, already have refined key tools for this purpose: predictive care paths and quality-outcome metrics.

The predictive care path captures evidence-based guidelines on clinical decisions, decision criteria and recommended interventions, and frames this information as a series of actions appropriate for a specific course of care. Quality-outcome metrics go beyond traditional quality metrics, which measure mortality and morbidity. They combine process metrics (measuring compliance with recommended treatment guidelines) and outcome metrics (which integrate patient quality of life into mortality and morbidity metrics). Predictive care paths combined with quality-outcome metrics make it possible to model both costs and outcomes and to test new clinical innovations in much the way new drugs or devices are evaluated.

This is evidence-based medicine at work. The amount and type of care required for most conditions can be predicted, so an outcome track record can be compiled—by physician, unit and hospital—which is exactly the value proposition that engaged customers want and get when providers compete for their business. Establishing predictive care paths and effectively using evidence-based medicine will help ensure that providers achieve better outcomes in a cost-effective manner. Hospitals also must use data to manage variability in practice, cost and quality.

Adopting time- and outcomes-based payment. The perverse financial incentives and bureaucracy of the present system drive physicians to order tests or other procedures that may not be necessary or helpful. We need to change the basis for paying primary care physicians. Primary care takes time with a patient—asking questions and diagnosing the cause behind symptoms, studying diagnostic tests and patient history, educating patients and guiding them in managing their own health, and coordinating their care when subspecialists are needed.

The important unit of value for primary care physicians, therefore, is time.Time-based rates will help eliminate the incentive to squeeze as many patients as possible into the day, which is what physicians need to do to sustain an income.

But financial incentives also must reward quality outcomes if they are going to improve quality of care. At the same time, the compensation for primary care must be set at a level that encourages physicians to choose primary care practice.

Avoiding unnecessary care. An effective framework will enable primary care physicians to play a leadership role in ensuring accountability for care. They will be able to coordinate their efforts better with aligned health care providers and specialists to avoid variations in practice.

One example is back pain and spinal problems, which are characterized by significant variation in treatment practices. Research has demonstrated that nonsurgical therapies can be effective for many patients, yet are underused because both doctors and patients find it difficult to choose among the variety of nonsurgical options. Physicians need time to understand their patients' conditions and avoid what has been described as overtreatment of chronic back pain through imaging, opioid analgesics and surgery.

If we modify the basis of payment for primary care physicians so they have time to manage care effectively, there is less incentive to order additional tests. This approach also will create greater incentives to work across the care continuum to achieve improved health outcomes.

Engaging insurers for accountable care. Insurers must require predictive care paths and change the basis for paying primary care physicians. Making these changes can reduce or even eliminate the incentive to provide unnecessary care.

Insurers can ensure efficiency by requiring providers to demonstrate that their services deliver economic and clinical value. Similarly, insurers can remove physicians from their networks if they are not achieving cost-effective, high-quality outcomes, or if they are spending too much time without any rationale for it.

Insurers also can encourage patients to be accountable for their care by providing discounts for maintaining good health and for not consuming resources unnecessarily, and by providing a range of products and pricing structures that charge higher premiums to those who demonstrate they aren't managing their health.

Accountability, Not Structure, Is the Key

An effective framework that involves coordination of care and accountability can be achieved without the use of an untested organizational structure such as an ACO. As providers and hospitals examine the requirements for creating an ACO, they must be careful not to create an organizational structure that magnifies problems inherent in the existing system.

Creating accountability for care doesn't require physicians to be part of a single organization, such as an ACO. It requires building accountability across the health care delivery system to ensure that change occurs within and across health care organizations, as opposed to relying on an institution to funnel accountability down to the various types of providers.

Rita E. Numerof, Ph.D., is the president and Stephen E. Rothenberg, J.D., is a business analyst at Numerof & Associates Inc. (NAI) in St. Louis.

The opinions expressed by authors do not necessarily reflect the policy of Health Forum Inc. or the American Hospital Association.