Can ACOs Rescue Healthcare?

Cora Nucci, February 23, 2011

In a curious case of Medicare billing, two California hospitals are reporting highly unusual rates of a Third World nutritional disorder.

The condition, called Kwashiorkor, is familiar to anyone who has seen photos of malnourished children living in impoverished regions of developing countries. Kwashiorkor is a Ghanaian word that means weaning sickness. Caused by insufficient protein in the diet, its chief physical manifestations are a distended belly, altered hair color and texture, and muscle wasting.

Kwashiorkor is rare in developed countries, to say the least. Yet a California Watch article appearing in SFGate reports that "in 2009, Shasta Regional Medical Center in Redding reported that 16.1 percent of its Medicare patients 65 and older suffered from kwashiorkor, according to a California Watch analysis of state health data. That's about 70 times the state average of 0.23 percent."
Is there an alarmingly high incidence of malnutrition among Medicare recipients in California health facilities operated by Prime Healthcare Services? Or is something else going on? Prime's director of reimbursement management told California Watch that, "Prime Healthcare hospitals cannot, have not, and will not engage in 'upcoding' or Medicare fraud."

For now, at least, there are more questions than answers.   But something is clearly rotten in healthcare. In the just-released HealthLeaders Media Industry Survey 2011, just 24% of health plan leaders polled said the industry is on the right track - - that's only one in four, a sure sign of trouble.

More encouraging data from the survey shows that nearly half (44%) of survey respondents said their organizations will be part of an accountable care organization within the next five years. More specifically, reimbursement ranks in the top three priorities for these executives over the next three years. 

As we await federal guidelines on ACOs, let's not forget what's behind the coming changes. Bundled payments will be among the most significant changes to come, of course. But let's remember that the 'A' in ACO is for 'accountable,' as in, we stand by this diagnosis, this care plan, these billing codes.

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