Chronic Care Coordination and Accountable Care Organizations

A chronic condition or illness is one that is likely to last more than one year, requires ongoing medical attention, and can limit a person’s daily activities. Arthritis, emphysema, cancer, cardiovascular disease, depression, diabetes, and obesity are among the most prevalent chronic conditions in older adults. The number of older people with chronic diseases and conditions is large and growing. In 2014, about 60 percent of adults age 18 and older had at least one chronic condition. About 28 percent had three or more chronic conditions.

Managing chronic conditions is costly for patients and payers. Despite some progress, there are large deficiencies in the delivery and quality of health care for chronic illness. Addressing the poor quality of treatment for chronic conditions and its high cost is a compelling need.

Monitoring treatment and coordinating care provided by multiple practitioners is key to chronic-care management. This ensures that patients receive timely, appropriate care while also avoiding unnecessary duplication of services and preventing medical errors. For some patients with multiple chronic conditions, meeting this objective requires a full range of medical and social support services.

Monitoring and coordination can increase quality and reduce health care costs by ensuring that patients receive recommended services when needed, avoid duplication of services, have providers who monitor their medications, and receive information to help them manage their conditions without exacerbating them.

Beneficiaries can help maintain and improve their health through healthy behaviors. Those with chronic conditions can learn to manage them by taking recommended preventive measures to avoid the onset or exacerbation of illness and recover from setbacks. Most patients will need assistance to manage their conditions and pursue healthy behaviors. Such assistance can be provided by medical homes. In Traditional Medicare, numerous barriers hamper widespread, sustained improvements in caring for people with chronic conditions. These include:

  • failure to value team-based primary care;
  • fragmentation of care delivery and poor transitions across settings;
  • misaligned fee-for-service payment incentives that do not value service integration;
  • lack of interoperable electronic health information systems, which makes it difficult for providers to monitor patient progress, share information, and track patients over time; and
  • inadequate medication management that can lead to increases in preventable drug-related problems.

Addressing these barriers requires multiple interventions aimed at providers, patients, and family caregivers, such as coordinated care, self-care management, and transitional care.

Coordinated care interventions include self-management by patients, ongoing monitoring of a person’s health and long-term care needs, and systems to ensure smooth transitions among care settings and providers. Coordinated care programs typically involve support for patients, medication management, improved communication, and coordination among providers.

Self-care management interventions include activities that provide patients (and their caregivers, when indicated) with information and strategies to manage and coordinate their care to improve their quality of life, increase functioning and independence, make more efficient use of health services, and help to lower costs.

Transitional care interventions reduce problems that occur when patients move from one setting to another. Those with chronic conditions are vulnerable if health care facilities and clinicians fail to plan for transitions by not providing follow-up services. Patients at risk for difficult transitions—such as those from hospital to home or nursing facility—include people who have five or more chronic conditions, a need for numerous office visits, poor health status, limitations in daily activities, or a low level of engagement in their care. Transitional care models assign a transitional care manager to coordinate and monitor care as well as provide patient and caregiver education and support. A care manager can be a nurse or other trained health professional.

The Centers for Medicare & Medicaid Services (CMS) has sponsored many chronic-care demonstrations to explore ways to improve care coordination without increasing costs. They have used different approaches such as care management, disease management, and medical homes. The ACA expands the number and type of Medicare projects that test ways to coordinate care and ensure smooth transitions for beneficiaries—including those with chronic conditions. These projects include:

  • the Medicare Community-Based Care Transitions Program;
  • the Medicare Independence at Home Demonstration;
  • using community health teams to support medical homes, regardless of payer type; and
  • implementation of incentives to reduce Medicare hospital readmissions.

Several states are also implementing various approaches to improving chronic-care coordination.

Emerging models of service delivery: Research indicates that the integration of service-delivery systems and the coordination of services can lead to more effective—and more efficiently delivered—health care than that provided by the current fragmented delivery system. Integrated systems employ a range of techniques to achieve these positive results, including the provision of decision support tools to clinicians, the use of team-based care, and activities that encourage patient engagement.

An accountable care organization (ACO) is a payment and service-delivery model in which groups of physicians, hospitals, and other health care providers take responsibility for the cost and quality of care provided to a patient population. Many private insurance companies have implemented these programs, using a variety of payment designs. The Traditional Medicare program has also established several ACO programs. Medicare beneficiaries who receive care from an ACO provider may also obtain Medicare-covered services from providers not affiliated with the ACO.

ACOs are characterized by a payment model that typically ties payment to performance on quality measures and includes financial incentives to constrain the total cost of care for an assigned population of patients. Some examples include shared-savings models. The ACO receives a financial reward if the total amount the insurer pays for services for the covered population during a year is below a specified target amount. Depending on the model, the organization may also be at risk for costs above specified levels.

Many questions remain about the most appropriate ways to ensure that these organizations provide high-quality services at a reduced cost. Some analysts believe they may exacerbate a growing trend toward consolidation among provider groups, which can potentially lead to higher prices for medical services by reducing competition and, in turn, generating higher costs for private and public insurers. Higher costs could negate potential savings from ACOs’ gains in efficiency.

Possible responses that address this concern include stronger antitrust regulation and enforcement, effective monitoring of quality metrics, and proper oversight (see also Antitrust in Health Care).

To be successful, ACOs must demonstrate their commitment to high-quality patient experience and reduced costs. A major issue with regard to ACOs is how patients would participate in one and whether they should be informed of their physician’s decision to join one. Some analysts believe that Medicare beneficiaries should be prospectively assigned to an ACO based on historical claims data about their past receipt of services from a given physician. In a voluntary scenario, a beneficiary would be informed of his or her assignment and could decide to remain with the provider/ACO or select another physician outside of the ACO. Others propose that patients should be retrospectively assigned to ACOs, as determined by their service use during the time corresponding to the payment period. However, in this last scenario, beneficiaries would not be informed about the delivery system in which they were receiving care.

Medical homes—also known as patient-centered medical homes—are team-based primary care practices that provide comprehensive, coordinated, and cost-effective care with the goal of optimizing patients’ health outcomes. Medical homes adopt a “whole person” approach to improving care through enhanced access, coordination, and support for patient self-management that is culturally appropriate, interactive, and respectful.

To date, research evidence is lacking as to whether medical homes consistently improve outcomes and lower costs and, if so, which specific features bring about these changes.