Accountable care organizations may have difficulty avoiding the failures of integrated delivery networks of the 1990s.

Accountable care organizations are intended to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Providers employed several of these mechanisms in forming the integrated delivery networks of the 1990s. The networks failed, however, because of heavy financial losses stemming from hospitals' purchase of physician practices and their inability to align incentives, garner capitated contracts, and develop the infrastructure to manage risk. Although the current mechanisms underlying accountable care organizations continue to evolve, whether and how they will have an impact on quality and costs remains open to question. Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply. As in the 1990s, success depends on targeting specific populations, such as people with multiple chronic conditions who need and may benefit from coordinated care.

Accountable care organizations: back to the future?

Accountable Care Organizations (ACOs) are networks of providers that assume risk for the quality and total cost of the care they deliver. Public policymakers and private insurers hope that ACOs will achieve the elusive "triple aim" of improving quality of care, improving population health, and reducing costs. The model is still evolving, but the premise is that ACOs will accomplish these aims by coordinating care, managing chronic disease, and aligning financial incentives for hospitals and physicians. If this sounds familiar, it may be because the integrated care networks of the 1990s tried some of the same things, and mostly failed in their attempts. This Issue Brief summarizes the similarities and differences between the new ACOs and the integrated delivery networks of the 1990s, and presents the authors' analysis of the likely success of these new organizations in affecting the costs and quality of health care.

Short- and long-term mortality after an acute illness for elderly whites and blacks.

OBJECTIVE: To estimate racial differences in mortality at 30 days and up to 2 years following a hospital admission for the elderly with common medical conditions. DATA SOURCES: The Medicare Provider Analysis and Review File and the VA Patient Treatment File from 1998 to 2002 were used to extract patients 65 or older admitted with a principal diagnosis of acute myocardial infarction, stroke, hip fracture, gastrointestinal bleeding, congestive heart failure, or pneumonia. STUDY DESIGN: A retrospective analysis of risk-adjusted mortality after hospital admission for blacks and whites by medical condition and in different hospital settings. PRINCIPAL FINDINGS: Black Medicare patients had consistently lower adjusted 30-day mortality than white Medicare patients, but the initial survival advantage observed among blacks dissipated beyond 30 days and reversed by 2 years. For VA hospitalizations similar patterns were observed, but the initial survival advantage for blacks dissipated at a slower rate. CONCLUSIONS: Racial disparities in health are more likely to be generated in the posthospital phase of the process of care delivery rather than during the hospital stay. The slower rate of increase in relative mortality among black VA patients suggests an integrated health care delivery system like the VA may attenuate racial disparities in health.

Is lower 30-day mortality posthospital admission among blacks unique to the Veterans Affairs health care system?

BACKGROUND: Several studies have reported lower risk-adjusted mortality for blacks than whites within the Veterans Affairs (VA) health care system, particularly for those age 65 and older. This finding may be a result of the VA's integrated health care system, which reduces barriers to care through subsidized comprehensive health care services. However, no studies have directly compared racial differences in mortality within 30 days of hospitalization between the VA and non-VA facilities in the US health care system. OBJECTIVE: To compare risk-adjusted 30-day mortality for black and white males after hospital admission to VA and non-VA hospitals, with separate comparisons for patients younger than age 65 and those age 65 and older. RESEARCH DESIGN: Retrospective observational study using hospital claims data from the national VA system and all non-VA hospitals in Pennsylvania and California. SUBJECTS: A total of 369,155 VA and 1,509,891 non-VA hospitalizations for a principal diagnosis of pneumonia, congestive heart failure, gastrointestinal bleeding, hip fracture, stroke, or acute myocardial infarction between 1996 and 2001. MEASURES: Mortality within 30 days of hospital admission. RESULTS: Among those under age 65, blacks in VA and non-VA hospitals had similar odds ratios of 30-day mortality relative to whites for gastrointestinal bleeding, hip fracture, stroke, and acute myocardial infarction. Among those age 65 and older, blacks in both VA and non-VA hospitals had significantly reduced odds of 30-day mortality compared with whites for all conditions except pneumonia in the VA. The differences in mortality by race are remarkably similar in VA and non-VA settings. CONCLUSIONS: These findings suggest that factors associated with better short-term outcomes for blacks are not unique to the VA.

End-stage renal disease and economic incentives: the International Study of Health Care Organization and Financing (ISHCOF).

End-stage renal disease (ESRD) is a debilitating, costly, and increasingly common condition. Little is known about how different financing approaches affect ESRD outcomes and delivery of care. This paper presents results from a comparative review of 12 countries with alternative models of incentives and benefits, collected under the International Study of Health Care Organization and Financing, a substudy within the Dialysis Outcomes and Practice Patterns Study. Variation in spending per ESRD patient is relatively small, but correlated with overall per capita health care spending. Remaining differences in costs and outcomes do not seem strongly linked to differences in incentives.

Private health insurance in developing countries.

A joint Wharton School-World Bank conference called attention to the high proportions of medical care spending paid out of pocket in most developing countries. One of the reasons for this, attendees said, is the problem in such economies of generating high tax revenues in a nondistortive way. Since people are paying out of pocket, they should be able to afford some private insurance that can spread the risk of above-average out-of-pocket payments. The potential efficiency gains from greater use of voluntary private insurance seem large, but there are a number of possible impediments to the emergence of such insurance.

Access to conventional medical care and the use of complementary and alternative medicine.

The use of complementary and alternative medicine (CAM) in the United States has greatly increased during the past decade. Using survey data from the 2002 National Health Interview Survey (NHIS), we show that adults who did not get, or delayed, needed medical care because of cost in the prior twelve months were also more likely than all other adults to use CAM. Recent increases in CAM use could be the result of not only the desire for individual empowerment and patient dissatisfaction with conventional medicine, as has been claimed, but also of increases in the relative cost of conventional health care.

Complementary and alternative medicine: personal preference or low cost option?

From acupuncture to yoga, Americans' use of complementary and alternative medicine (CAM) is widespread and growing. The reasons that people give for using CAM are as diverse as the CAM therapies themselves: some perceive that conventional health care is ineffective, while others consider CAM to be more consistent with their own values and beliefs about health. As conventional health care costs rise, it is also possible that some people turn to CAM as a low cost alternative. This Issue Brief summarizes research that evaluates the relationship between CAM use and perceived access to conventional health care.

Integrated delivery networks: a detour on the road to integrated health care?

This paper reviews the rationales and evidence for horizontal and vertical integration involving hospitals. We find a disjunction between the integration rationales espoused by providers and those cited in the academic literature. We also generally find that integration fails to improve hospitals' economic performance. We offer seven lessons from hospitals' efforts to integrate and then suggest four alternative models for achieving integrated delivery of health care services.