Dr Farzad Mostashari Explains How ACOs Overcome Short-Term Thinking

In order for accountable care organizations (ACOs) to overcome short-term thinking they must be careful with their fee-for-service codes and ensure that people are using the system responsibly, Farzad Mostashari, MD, chief executive officer of Aledade, said at the National Association of ACOs Spring 2016 Conference.

Transcript (slightly modified)

How can accountable care organizations overcome the old mentality of short-term thinking and focus more on the long term?

I think you have to paint the destination postcard. Like, help people see the goal of where we’re going. We also have to make it easier, frankly, to do the right thing and we have to find ways of getting people paid on the journey there. And this is where a lot of the new fee-for-service codes, whether it’s around annual wellness visits, transitional care management, chronic care management, can be helpful to provide a bridge to where you’re going to see the returns.

But it’s in the nature of the beast, right? Like, it’s still fee-for-service, and it can still be abused, it can still be overused, it can still be churned. So we have to be very careful that even as we take advantage of these new good fee-for-service codes that we don’t have people taking advantage of the system and overdoing it. I don’t think 60% of patients need chronic care management at $500 a year payments for Medicare—no way. But there are vendors out there who are selling exactly that, so that’s, I think, one of the challenges of this transition from volume to value.

What do you do during the transition, and how do you make sure that you have a business model that’s robust all the way through? It’s a lot less of a problem, frankly, for physician-led ACOs than it is for health systems, who really face a drop in revenue and they have to go through a valley of death before they maybe come out the other end. For physician-led ACOs it’s a lot better, but they have fewer resources to support them during that transition and so we have to work extra hard to keep the upfront costs very low, the cost of entry very low, and find ways of sustaining those practices through that transition.