Insights September 2018
Accountable Care Organization

Caring for Health the People’s Way

Duncan Sinclair


Healthcare in southeastern Ontario does very well in the provision of treatment and care for those with acute life-threatening conditions. But the simple, reliable, effective, and pleasant care that so many people need, especially the frail elderly, ‘needs work’, as the saying goes. The harried woman living on a side-road with her aged mother-in-law with insulin-dependent diabetes, crippling arthritis and infected teeth, who can’t be left alone because of her developing dementia, needs care she is not getting. And neither is that homeless guy with alcoholism and other mental illnesses on his corner downtown. 

Don’t get me wrong! High-tech healthcare remains vital in the spectrum of health and healthcare services. Acute illnesses, injuries, heart attacks, strokes, seizures, and the like are not going to go away. But community-based care of the vulnerable, here and elsewhere, if not a catastrophe, is closer to a disgrace than an embarrassment.

And that’s not because we are not spending enough – some $242 billion in 2017, $6,604 per Canadian, 11.5% of our Gross Domestic Product. Yet we stand 9th out of 11 developed countries in what we are getting, measured in terms of accessibility, timeliness, safety, reliability, effectiveness, and health outcomes. 

How come? The answer is complex but one reason is that other countries have more genuine systems of health and healthcare services; their ‘players’ are better coordinated. Another is that most insure their vulnerable people better for prescription drugs, rehabilitation, dentistry, home and community care, and other services. Of spending in 2017, 21% was spent out-of-pocket by you and me, about $1400 a year, over $100 a month that lots of people just don’t have. So, they do without; their minor on-going conditions become acute and before you know it an ambulance is bringing them to the ER with problems that can only be dealt with by high-cost, high-tech healthcare.

Our health service providers (HSPs) are as good as any, perfectly able, working together, to deliver the same or a higher standard of care as is achieved anywhere. If the principal missing ingredient is connectedness, surely we can figure out how to provide that. We are not lacking communication devices or know how.

What’s to be done?

First, let’s imagine government has loosened its rules to permit a significant degree of variation in how money is spent and how services are provided in Ontario’s different regions. That it has discovered that the tried and true way to find better ways of doing better things is to empower ‘worker bees’, the people on the ground, enabling them to experiment on how to work more effectively and efficiently. In my dream world, the Ministry has said, “here’s the money spent on health and healthcare in your region. Develop incentives and give your HSPs the freedom to figure out how best to distribute their resources to optimize the health of the people they serve. We (the government) will hold you accountable, as you can hold them accountable in turn, by requiring measures and reports on three things,

  1. the health of the people served,
  2. their satisfaction, and
  3. the comparative cost of providing the range of health and healthcare services needed to keep them well and happy.

If your costs are lower than average and the people are healthy and happy you (and they) get to keep half the savings; if they are higher, the results not so good and the people unhappy, we will find new leadership in the Southeast. 

What would you do?

The first thing I would do is fly to Christchurch, New Zealand. That region of about 600,000, was hit by two major earthquakes, one in 2010 and again, harder, in March 2011. Much infrastructure was destroyed and many were killed, injured, and rendered homeless. That crisis catalyzed development of an Accountable Care Organization (ACO) with the mandate to provide the full range of services needed to optimize the regional population’s health and well-being. At its core are two organizations: Pegasus, made up of the region’s primary care providers and linked to a wide range of other health and social services, and Canterbury Hospital, a 500-bed facility, the equivalent of Kingston Health Sciences Centre. All HSPs are under the global governance of the Canterbury District Health Board. Their ACO is doing a remarkable job, from providing the high-tech, sophisticated, hospital-based procedures needed by people acutely ill or injured, to the community-based health and social services those with multiple chronic illnesses need to stay well and happy in their own homes. And they are saving money in the process, reinvesting it in a shared health information portal and other capital needs.

An ACO is a team of providers that provides the full range and volume of health and healthcare services needed to optimize the health and well-being of a defined population using a fixed budget negotiated with a government or insurance plan. ACOs are funded by capitation, so much money per person living in the region. The incentive to do well is if the ACO keeps its enrollees healthy and happy less expensively than when its providers were ‘paid-by-the-piece’, it can keep a significant proportion (usually 50%) of the money saved. Another incentive is that the ACO and its providers can decide themselves how best to deploy their resources of money and personnel across the whole spectrum from hospital- to home and community-based service. Provided the people are well served, an ACO can run its own affairs and pay its HSPs and others in ways it considers best without having to seek approval or permission from any government or insurance company bureaucrat.

There are now lots of ACOs set up under Medicare and Medicaid in the U.S. and in Britain too. Their long-term performance has yet to be assessed but evaluations so far reveal that the great majority are successful as measured by:

  • the health status and satisfaction of the people served,
  • the money saved, and
  • the fast rate of new ACO formation.

ACOs save money by avoiding the provision of unnecessary services, like sophisticated tests when they are not really needed. It is saved also by primary care teams big enough to do house calls and avoid out-of-hours ambulance trips to ERs. Also, providing TLC to vulnerable people at home beats having them occupy an ALC bed in a hospital or place in a long-term care facility, care-wise and money-wise. 

Can we create an ACO of the design and size appropriate for southeastern Ontario? It’s doable but dependent upon enlightened governance.

From where can such leadership come?

Sadly, we don’t have a body like Pegasus. Our primary care providers, whether solo practitioners, team practices, FIGS, FINS, Health Links, or whatever, are not set up as collaborators. Attempts are beginning to diminish that fragmentation but progress is ponderously slow. So, the leadership needed is unlikely to come from primary care, the very core around which every ACO needs to be built. And that’s a challenge!

It is also unlikely to come from home and community care providers. Most are small, poorly staffed and funded, with Boards unaccustomed to looking at big pictures. They just don’t have the “oomph” or the respect of the bigger players in any future ACO.

So that leaves our hospitals with what most people would agree are their strong, experienced Boards, but also with the handicap of narrow preoccupation with what happens within their own four walls and the high-tech end of healthcare. They also bear the image of financial black holes, hoovering up money, impoverishing everyone else. Another governance ‘player’ we have uniquely in this region is SEAMO, the Southeastern Academic Medical Organization, a collective that, in effect, provides the highly trained person-power necessary to staff the Health Sciences Centre to discharge its integrated mission of clinical service, teaching, and research. The Kingston HSC Board, working with SEAMO, is a nucleus from which leadership of the ACO could come. 

In addition to leadership, the communication of information is central! To perform well, every member of the choir has to have the same hymn book and be on the same page when the organist starts to play. To care for people properly, every HSP needs to have the same information about their patients’ conditions and what other providers have done to help them. The collection and sharing of health information (including with the people concerned) is an indispensable ingredient in an effective ACO. It is essential also to measure and report to itself, its enrollees, and its funders on the health and well-being of the population served and the cost of keeping them well and happy. ACOs are, after all, accountable care organizations!

It took two earthquakes to achieve change to an ACO in New Zealand. Surely, we here in southeastern Ontario can get ahead of the curve and act before we have to when the next big crisis comes over the horizon. Believe me, one will come!

About the Author(s)

Duncan G. Sinclair, School of Policy Studies, Queen’s University


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