Patient “Leakage”: Rethinking Two Field of Dreams Assumptions About ACOs

A study released last week by the Massachusetts Attorney General contains surprising data to challenge two commonly held ACO (accountable care organization) “Field of Dreams” assumptions. These assumptions relate to patient “leakage” — out-of-network patient care and referrals.

1) Hospital administrators assume that tighter physician-hospital integration (e.g., through employment of physicians) will result in “captive referrals” by physicians back to the mother-ship hospital.

2) Medicare administrators are assuming that Medicare Shared Savings ACOs will be able to coordinate patient care even without limitations on patients’ choice to go to providers outside of the ACO provider network.

Here’s the data that challenges the validity of BOTH of these assumptions:

Particularly for provider systems where hospitals and physicians are jointly at risk for the quality and cost of patients’ care, and have worked together to coordinate and improve care, we would expect to see physicians referring to their partner hospital more often. However, for the two physician-hospital provider systems in Massachusetts with the most years of experience managing referrals for HMO/POS patients under a global payment, one health insurer’s 2009 referral data shows that only 35-45% of adult inpatient care, as measured by revenue, goes to the partner hospital. That percentage can be even lower for providers with little to no experience managing where their patients receive specialist/hospital care, or under plan designs that do not require referrals. [emphasis added]

I found these statistics staggering. If I were a hospital administrator, I’d be pissed that “my” docs have the nerve to let patients outside of our system — even though I know that Stark anti-referral laws could send me to jail for having these types of impure thoughts.

If I were a Medicare administrator, I’d be frustrated that lawmakers gave me an impossible mandate in the ACO legislation — “don’t restrict patient choice, but make sure you do a good job of coordinating care.”

Managing patient “leakage” is a complex issue.  The Massachusetts AG report points out it requires the balancing of “competing goals of consumer choice and effective and clinical and financial management of care.”

There’s a lot we’re assuming…and a lot yet to understand.