Tell Me If You Heard This One Before?

Many states have the idea that ACOs (accountable care organizations) can hold down Medicaid spending.  This from Kaiser Health News:

To ease that financial strain, Minnesota is at the forefront of a growing number of states testing a Medicaid payment system. It rewards hospitals and physician groups holding down costs by keeping enrollees healthy.

Under this arrangement, those health care providers are asked to do more than just treat medical issues such as diabetes and heart disease. They are called on to address the underlying social issues — such as homelessness, lack of transportation and poor nutrition — that can cause and exacerbate health problems.

Wow, that seems novel and reasonable.  Why not have doctors and hospitals get rewarded for NOT spending too much? Nothing can go wrong with that. And why not have the family doctor be responsible for homelessness or lack of transportation?  I have always said that family docs should adopt more homeless people or at the very least, pick them up and drive them to their appointments. This all sounds like a great plan except, of course, there is the fact that it doesn’t work and ACOs lose money.

Here is a section from the end of the article:

The ACO model has raised concerns among managed-care companies that Minnesota and other states have used for decades to control Medicaid spending. Those companies get a monthly fee from Medicaid for each enrollee and often require those patients to seek care with doctors and hospitals that have contracts with the managed-care firm. The companies profit if they spend less on care than they receive in the state allotment.

“We are aligned with the goals … to explore innovation and provide better delivery of care,” said Scott Keefer, vice president of Minnesota Blue Cross and Blue Shield of Minnesota, which has 300,000 Medicaid members. But, he added, much of the ACO savings cited by state officials are dollars taken from managed-care company profits.

His health plan lost more than $200 million from Medicaid operations during the past two years, partly because it had to pay part of its state funding to ACOs.

“We are not magically saving money. … We are moving the financial deck chairs around,” he said.

I actually find it humorous when you compare the optimism of how this article starts to this last section I highlighted.  It’s like a terrible fable:

“Once upon a time there was a beautiful princess and then she died. The end.”

How is it possible that this ACO concept still survives?  And how is it that the AAFP still is in love with ACOs?  Just Google AAFP and ACO and see how intertwined they are.

I don’t know the answers.  I can tell you that without skin in the game then these patients have no reward for staying healthy or out of the ER.

I have heard the concept of giving Medicaid patients preloaded cards (like for food stamps or EBT cards) to use for monthly payments to their DPC doctors.  I like it and would love to see how much money could be saved WITHOUT making these DPC docs hand over metrics because they would not do that. Heresy you say?  No more than trying this ACO trick over and over.

I think it is worth a try.  I think anything else is worth a try.

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Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  5 comments for “Tell Me If You Heard This One Before?

  1. Chris
    June 26, 2018 at 10:50 am

    President Obama started this rhetorical train rolling so I blame him for setting it in the mind of the people of our country that preventive medicine is cost effective. It is not. I read a study a while back trying to prove the cost effectiveness of preventive medicine and the researchers where only able to demonstrate that immunizations and screening colonoscopy (but only your first one) were cost effective. Sure, preventive medicine prolongs lives and preserves quality of life, but it is expensive. So any ding-bat that ever says that we can save money by “keeping people healthy” needs to get slapped. Actually, they just need to be given the response: “Really, if you know of a study that proves that I would really be interested in reading it because as far as I know there has never been one that demonstrates that”. Then slap them.

  2. James Tinsley
    June 21, 2018 at 9:15 pm

    Surprised the AAFP supports ACOs? You’re not paying attention. They supported Obamacare full throttle. Head of the AAFP, Ted epperly, had a photo with Obama for it in one of the AAFP journals. That’s the year I quit. I will never give another dime to them.

  3. Perry
    June 19, 2018 at 9:22 am

    They. Just. Don’t. Get it.

  4. Steve O'
    June 19, 2018 at 9:12 am

    A Health…Maintenance Organization! Hmmm. H.M.O. I like it! Thanks to the great innovations and improvements in Health Maintenance in Massachusetts, the entire medical care system tanked and had to be replaced by Romneycare, a pre-Obamacare. It went from “spend money on health!” to “put in a broken treadmill in the basement and chastise patients for not using it.”
    See Wikipedia for this and other stellar ideas from the Ivory Tower.
    Of course, you all know about the 40th anniversary of the RAND Health Insurance Experiment (HIE), the largest health policy study in U.S. history and the only experimental study of how cost-sharing arrangements affect people’s use of health services, the quality of care they receive, and their health status. History of RAND HIE
    Guinea pigs can’t read? Yes, they can, so keep it on the Q.T. See link RAND HIEhref=””>RAND HIE The fundamental question – how does utilization vary if the patient has to pay for services, versus free care?
    It’s all right here. Whoever pays the piper reduces utilization, and the rest just sail on, no cost no consequence. Imagine that. And the more studies something provokes by the Medical Leadership, the more sympathetic the public is to the straits of the subject, especially if it regards patients.
    For instance, Cutting Drug Co-Payments for Sicker Patients on Cholesterol-Lowering Drugs Could Save a Billion Dollars Every Year. Cost to whom? From whom?
    Squeeze out the middleman/doctor, see what that does, perhaps. Then patients can just Maintain their Health through an Organization. Fool me twice, it must be Government.

  5. Mario
    June 19, 2018 at 7:52 am

    Preventive medicine has been around for a long time. Maybe even before Hippocrates told us to get some fresh air and eat vegetables. Free will and human nature need motivation, harsh motivation if you’re not on the same page. I suspect most socialistic endeavors start this way: for the good of the masses. Even if it takes gulags or sugar cane fields to motivate. Cultural Marxism , IMO, is insidious and very contagious, especially for those elitists- minded individuals with good intentions. Because we’re smarter than everyone else and know better…. I could go on but my tinfoil hat is falling off so gotta go..

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