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Does this Obamacare experiment offer significant savings?

February 6, 2017 at 6:35 PM EDT
One of the goals of the Affordable Care Act was to develop organizations that offer doctors and hospitals a deal: In exchange for more efficient care for Medicare recipients, providers receive a share of the savings as a bonus. Now that ACOs have become embedded in the health care system, are they really working? Special correspondent Jackie Judd reports.

JOHN YANG: In that interview with FOX News that aired yesterday, President Trump said it could take longer to repeal and replace Obamacare than he’d indicated previously.

Last month, the president said he’d offer a replacement plan as soon as his health and human services secretary is confirmed. But Mr. Trump told Bill O’Reilly that it could take until next year.

BILL O’REILLY, Host, “The O’Reilly Factor”: Can Americans in 2017 expect a new health care plan rolled out by the Trump administration, this year?

PRESIDENT DONALD TRUMP: In the process, and maybe it will take until some time into next year, but we are certainly going to be in the process. Very complicated. Obamacare is a disaster.

You have to remember, Obamacare doesn’t work, so we are putting in a wonderful plan. It’s statutorily takes a while to get. We’re going to be putting it in fairly soon. I think that, yes, I would like to say by the end of the year, at least the rudiments, but we should have something within the year and the following year.

JOHN YANG: Most of the focus on the Affordable Care Act has been on coverage.

But among the goals of the 2,000-page law is to develop something called Accountable Care Organizations. They offer doctors and hospitals a deal. In exchange for better and more efficient care for Medicare recipients, the providers get a share of the savings.

Special correspondent Jackie Judd reports.

JACKIE JUDD: Creating health care for the future sometimes means going back to the past.

Nurse practitioner Dana Sheer makes old-fashioned house calls to high-risk patients, like Howard VanVleck, who suffers from a neurological disorder. On this day, a cough alarmed his wife.

LISA VANVLECK, Wife of Howard: When I called the doctor’s office about it, they said, can you bring him in? And I said, really not.

JACKIE JUDD: This visit was low-tech and quick, but, if needed, VanVleck can get an in-home ultrasound, an EKG, even a chest X-ray.

DANA SHEER, Nurse Practitioner: Our program is really aimed at trying to figure out ways that we can provide really good, cost-effective, quality care at a patient’s home, at a place where they can actually thrive and do better.

JACKIE JUDD: How many times during that year would he have been in the hospital if you or a colleague hadn’t visited?

DANA SHEER: Likely every time.

JACKIE JUDD: Sheer is part of the Accountable Care Organization, or ACO, run by Partners HealthCare, which collaborates with several Massachusetts hospitals.

At Mass General, Jason Wasfy does the once unthinkable for a cardiologist. He routinely e-mails or video-chats with patients.

DR. JASON WASFY, Massachusetts General Hospital: There are cases, high cholesterol, for example, where I don’t Actually need to actually physically examine the patient.

JACKIE JUDD: Medicare is not going to reimburse Partners for the home visit or the teleconference. They are not covered services, so why invest in these programs?

Because, if they lead to lower costs to the government and better care, Partners may earn end-of-year bonuses from Medicare.

DR. TIMOTHY FERRIS, Manager, Partners HealthCare: How are you doing today?

JACKIE JUDD: Primary care physician Tim Ferris manages the ACO.

DR. TIMOTHY FERRIS: It allows us essentially to customize the delivery of services to specific needs and not base how we are delivering that service on exactly what is paid for in a fee-for-service system.

JACKIE JUDD: An early concern about ACOs was, would doctors skimp on care in order to save money? So far, there is no evidence of that happening.

WOMAN: This is triggering her anxiety again.

JACKIE JUDD: At Partners, it has created 26 new programs since launching its organization, everything from integrating mental health services with primary care to offering diabetes classes.

MAN: I think we will start with the data on the front page here.

JACKIE JUDD: Teams of primary care physicians, nurses and psychologists meet weekly to coordinate care.

WOMAN: We have to do better. I mean, 81 percent is good, but…

MAN: It’s not good enough.

WOMAN: It’s not good enough.

JACKIE JUDD: Without much fanfare, Accountable Care Organizations have become embedded in the health care system. While the government jump-started the movement, private insurers are also involved. In 2012, eight million Americans got their care through an ACO. Today, that number is 31 million. That’s 10 percent of the population.

The new administration has not weighed in on the fate of government-run ACOs. Many experts believe they will remain in place.

DR. TIMOTHY FERRIS: We are committed to this journey, regardless of what happens, that we have built sufficient confidence that this is the right thing to do for our patients.

JACKIE JUDD: Partners is a major player among the nearly 900 ACOs across the country. And its size helps cushion the costs of ramping up and maintaining its organization.

Dr. Peter Slavin runs Mass General.

DR. PETER SLAVIN, President, Massachusetts General Hospital: Where we stand to gain financially is, we have now freed up capacity within the hospital that the ACO patients used to utilize, and we can use that capacity to serve patients from other networks, from other parts of the country, from other parts of the world.

JACKIE JUDD: Patients who would be paying more for your services?

DR. PETER SLAVIN: Patients who would be paying more for our services. That is correct.

JACKIE JUDD: So, what is Partners’ track record? Mixed. Most quality measures have improved to varying degrees. Hospital admissions dropped last year by 6 percent over the previous year. The way care is delivered has been transformed.

Cost, though, is stuck in neutral. Partners earned bonuses two times by spending less than expected. But the other two years, it didn’t qualify for bonuses and it had to absorb the expenses of those unreimbursed services.

Partners’ record mirrors the national trend in ACOs. The result is Medicare has saved only a modest amount of money.

Ashish Jha, a doctor and health policy researcher at Harvard, was an early supporter of ACOs and he still is. But he also is questioning whether early expectations for dramatic cost savings and quality improvements will ever be met.

ASHISH JHA, Harvard School of Public Health: I guess I thought by sort of year four, year five, we would have started seeing real gains, kind of nationally.

And, of course, you would expect some organizations to fail, you would expect some organizations not to do a good job. But I — maybe I was just being unrealistic. But when I heard the ACO experts talking five years ago, I heard points of, within a couple of years, we’re going to start seeing real movement. And that hasn’t happened.

JACKIE JUDD: Ferris counters that altering a complex culture, making big up-front investments and reorganizing care take time and certainly more than four or five years.

DR. TIMOTHY FERRIS: You have to commit to the long haul here. And we thought, initially, that we would be able to make big changes quickly. And it’s quite clear that that’s not true.

JACKIE JUDD: According to government analyses, primary care ACOs are showing more success than the large health systems.

Coastal Medical in Rhode Island has 85 primary care doctors. Since 2012, it has saved Medicare $24 million and earned almost half back in bonuses.

CEO, Dr. Alan Kurose, says not being linked to a hospital makes a difference.

DR. ALAN KUROSE, CEO, Coastal Medical: There will be less demand for inpatient hospital services if we really do coordinated care, patient-centered care well. And so that hits the bottom line of a hospital.

MAN: We’re going to start by just checking your oxygen level.

JACKIE JUDD: Coastal medical keeps clinics open every day of the year, and some have late hours.

WOMAN: How is everything going?

JACKIE JUDD: The practice hired more support staff, including pharmacists, physician’s assistants and nurse practitioners, because of the time given to the sickest patients.

ABBE SHUSTER, Nurse Care Manager: We have one patient, I call him every morning just to make sure he is up for the day. I check on how his pain level, if he’s taken any of his pain meds yet, has something in his stomach for the day. And we have found, by doing that, that he’s been able to stay in his home and continue to get his at-home nursing services.

JACKIE JUDD: Ironically, many patients are not even aware of being part of an Accountable Care Organization. They just know different services are available.

Brenda Fougera has chronic medical problems.

BRENDA FOUGERA, Patient: If I need a same-day appointment because I have a cold, because, with me, with my lungs, they aren’t good. And Dr. Hubbard would start me on certain things where I didn’t end up in the hospital or end up with pneumonia.

JACKIE JUDD: Even with its early success, Coastal Medical and other ACOs are still searching for that elusive formula of better care at a lower cost.

DR. ALAN KUROSE: Our experience is that there are a lot of smaller buckets of costs, and you have to work on a lot of them. And you don’t need one clinical initiative. You need a portfolio of clinical initiatives.

JACKIE JUDD: Whatever the fate of Obamacare, this experiment likely will be given several more years to prove whether personalized, coordinated care really does in the end save large amounts of money.

For the PBS NewsHour, this is Jackie Judd in Boston.