Jerry Garrett can clearly recall his first encounter with medical care. With neatly cropped white hair and a wisdom gained from traveling the world, the 84-year-old expresses himself with razor-like precision.
He sits at his kitchen table and thumbs through the yellowed pages of a first-aid manual thrust upon him during World War II. Having worked with nothing more than a collection of crude anatomical drawings and scant descriptions of treatments, Garrett, then serving as a radio operator in the Merchant Marines, had to quickly learn how not to make mistakes.
“In the Merchant Marines you are the medical officer by default as the radio operator,” he says. “I had no experience; I was 17 years old and had come straight out of high school, and all I had was this book and a medicine chest.”
He says experiences like diagnosing a shipmate’s appendicitis later influenced the precision of care he provided for his late wife, Sue, as she battled cancer and other ailments.
Shortly after retiring from a successful career as an engineer, Garrett began to care for her. In 1998, Sue Garrett was diagnosed with a rare neurological disorder called multiple system atrophy. In the 12 years that followed, she not only lived three years longer than doctors had predicted, but also battled an aggressive form of cancer. Just when it seemed she had won the battle, in late 2010, Sue Garrett’s symptoms recurred. Her cancer had returned and had spread.
“There was no treatment at this point,” Garrett says. “So we immediately put her in hospice and in March … she passed.”
Garrett was taken aback when his primary doctor told him just months after his wife’s death that he could no longer afford to see him. Garrett had overcome a slew of life-threatening conditions himself, including an aortic dissection, cardiovascular issues and an aggressive prostate cancer.
“He once told me that my wife and I were his favorite patients,” Garrett says. “But he ended up asking me to find another doctor, and that has been quite difficult as a Medicare patient.”
After spending the past four months looking for a new primary physician, Garrett recently found his way to Health Services of North Texas based upon the recommendation of his friend, Dr. Derrell Bulls, former chairman of the board at Denton Regional Medical Center.
A new business model
Just behind Denny’s restaurant on the southbound side of Interstate 35, the headquarters of Health Services of North Texas is rapidly expanding its services to establish itself as a medical home for patients like Garrett whose primary care doctors reduce Medicare patient loads to cope with increasing cuts to their reimbursements.
With health care reform, Medicare patients may find a solution in accountable-care organizations. The new buzzword in the landscape of health care reform, accountable-care organizations — or ACOs — had largely remained elusive until now. They take up a mere seven pages out of the 2,409-page health care reform legislation; yet, they are projected by some experts to have a resounding impact upon the way patients receive care in the near future.
After months of speculation, the Centers for Medicare and Medicaid Services, which administer Medicare, Medicaid and the Children’s Health Insurance Program, announced in late December the Pioneer Accountable Care Organization Program and named 32 models in the program. The North Texas Specialty Physicians of Fort Worth is among the participating groups, supported in a collaborative effort with Texas Health Resources to serve several counties across North Texas.
Pioneer ACOs will, in essence, test the waters beginning this year, building for later initiatives under the Medicare Shared Savings Program.
Under the savings program — established by the Patient Protection and Affordable Care Act signed into law in March 2010 — accountable-care organizations can share Medicare’s savings if they reduce costs and improve the quality of care for Medicare beneficiaries. ACOs are expected to reduce costs by allowing physicians and other providers to collaborate and manage the care of a minimum of 5,000 Medicare beneficiaries, who will pay a fee to the system. They are also expected to meet 33 quality-of-care standards under the program.
Accountable-care organizations are expected to look more like large-scale hospital systems, rather than smaller physician practices, and do away with the fee-for-service business model.
Dr. Donald M. Berwick, an administrator with the Centers for Medicare and Medicaid Services, explained ACOs in an October 2011 video on the government-run website Healthcare.gov.
“An ACO will be rewarded for providing better care and investing in the health and lives of patients,” Berwick said. “ACOs are not just a new way to pay for care but a new model for the organization and delivery of care.”
According to the U.S. Department of Health and Human Services, this new model is projected to save Medicare up to $960 million in the first three years — a number far short of Medicare and Medicaid’s $1.8 trillion budget for the same three-year period.
Some experts question whether the savings will outweigh the costs associated with establishing an ACO — an estimated $26 million per organization, according to the American Hospital Association.
“It is a fairly complicated decision, obviously, in regards to the financial aspect of it,” said Charles
Bailey, senior vice president and general counsel of legal and regulatory compliance at the Texas Hospital Association. “Can they [hospitals] truly find savings that they can share with the Medicare program and all the regulatory requirements that are imposed by that rule? Many hospitals are having to assess whether they can make money with the ACO model and meet all the requirements.”
In November, Federal Trade Commissioner J. Thomas Rosch expressed his concerns regarding the viability of the model at the American Bar Association’s Antitrust Fall Forum.
“On its face, the Medicare Shared Savings Program sounds promising by using financial incentives to reduce costs and improve quality of care,” Rosch told the crowd. “Nevertheless, I am skeptical that accountable-care organizations will actually lead to any net health care cost savings.”
The Federal Trade Commission believes the models would actually drive health care costs upward, Rosch said, while reducing quality of care. Monopolized hospital markets would result from the consolidation of physicians, hospitals and other services falling under the ACO umbrella — the exact opposite effect of the health care law goals.
The actual savings projected by the Centers for Medicare and Medicaid Services in the establishment of ACOs was nothing more than a “rounding error,” Rosch said.
While hospitals and physician groups across the country were opposed to the initial rules, the final rule on ACOs released by the agency in November has hospital groups scrambling — and more positive about the changes coming in the next few years.
Although accountable-care organizations are beginning to take form, many health care providers are likely to wait to see how the Pioneer model works out before signing a three-year contract with the federal government to participate in the Medicare Shared Savings Program, said Lee Spangler, vice president of medical economics for the Texas Medical Association.
“If ACOs are going to work and truly save the federal government money in the Medicare program,” Spangler said, “the initial participants are going to have to be successful, and then their success will have to be replicated across the country.”
Texas Health Resources adopted the accountable-care practice long before the reform legislation became law, according to Stan Morton, CEO of Texas Health Presbyterian Hospital Denton. However, the organization has no intention of becoming an official accountable-care organization. Instead, Texas Health is focusing on aligning itself with other area services and providers much like its collaboration with North Texas Specialty Physicians, an independent physician association comprised of nearly 600 family and specialty doctors serving residents in North Texas. From this, Texas Health’s approach toward accountable-care is a good example of how these “accountable-like” organizations will operate.
Out of the ER
Some of that effort by Texas Health Resources has included donating money to Health Services of North Texas, so the clinic can expand its services to provide access to care for patients who may otherwise end up in local emergency rooms, said DeeDee Romero, the clinic’s head nurse.
“We have a partnership with both [hospitals in Denton] in that we are helping them try to keep patients out of the ER,” Romero said. “When someone goes to the ER and they need a follow-up, we take on that patient for them because if the patient goes back to the ER, Medicare and Medicaid are not going to pay the hospital. So we are filling in gaps in places that are not being filled.”
With a proposed 27.4 percent cut in Medicare reimbursement, many physician advocacy groups, such as the Texas Medical Association, are pleading with Congress to address the outdated Medicare payment formula or things could get much worse. According to a recent survey conducted by the association, nearly half of participating Texas doctors said that they would opt out of Medicare if such a cut were to go through.
Some industry experts believe such issues are a precursor of things to come when 32 million newly insured individuals will struggle to find access to primary care physicians as the law is fully implemented in 2014.
“Even with the health care reform as it is written, all those uninsured patients still won’t be covered,” said Morton, of Texas Health Denton. “There is going to be a lot of people who are newly covered who have the impression that they have access to care, but in reality, the only access they will have in today’s environment will be emergency rooms.”
Some people with chronic diseases, such as diabetes, use the emergency room for primary care because of that lack of accessibility, said Cindy Williams, vice president for business development at Denton Regional Medical Center, which houses the city’s only certified trauma center.
“But once you hit the ER [with diabetes symptoms], it’s often too late,” Williams said.
The hospital will take care of its patients, she said, but it is better if people have more access points for primary care so that the trauma center, with its specially trained staff, can devote its resources to patients with life-threatening issues.
Other experts remain hopeful that ACOs will allow patients to take advantage of their newly established access to primary care physicians, rather than emergency rooms.
Into a medical home
On a cool, late November day, about a dozen chairs circling the waiting room of Health Services of North Texas’ Denton clinic are full. Many patients have traveled from nearby counties to be seen by a physician — for some, it will be the first time in quite a while.
The clinic is unassuming, embodying much of the changes taking place in health care. The lobby’s blue-and-white textured walls help subdue the reverberant murmur of conversation floating between patients settled in a brown vinyl chairs, many of whom acknowledge the challenge they faced in the past when confronted with illness. Some discuss the long waits and insurmountable costs from going to local ERs, while others sit alone shaking their heads in silent agreement.
“This agency has a history of caring for the people no one else wants,” said Dr. Ron Aldridge, CEO of Health Services of North Texas.
Established as AIDS Services of North Texas in 1988, the clinic’s first home was the back room of a local church. The staff provided support for people with HIV and AIDS.
“That was the only thing we could do. … Everyone, practically, died back then,” Aldridge said.
The clinic has since expanded its offerings. In addition to providing care for patients living with HIV, AIDS and mental illness, the clinic provides a range of services from annual checkups to the treatment of chronic illnesses such as hypertension and diabetes.
The clinic accepts patients with and without insurance, and works on a sliding fee scale for anyone without insurance. Funded by a variety of sources, including Medicare, Medicaid, allocations under the Ryan White Care Act and a slew of grants, the clinic is treating a growing patient load.
Out of the seven exam rooms, only a few remain open at a time as the turnstile of patients with diabetes and hypertension visit with one of the clinic’s three medical providers.
Each room contains a laptop computer, instead of the clipboards and patient charts of yesteryear. While not as advanced as the systems larger hospitals employ, clinic staff members say the electronic medical records system has made patient care much more efficient. The system allows the staff to track the course of care and save costs by eliminating needless procedures.
Under health care reform, community health clinics serving poor and underserved populations like Health Services of North Texas can seek a designation to become a federally qualified health center. These centers can receive certain benefits like increased Medicare and Medicaid reimbursements and grants to expand their services. Additionally, the 1,124 federally qualified health centers across the country also have the ability to become ACOs, or join existing organizations.
Aldridge acknowledged that if given the opportunity, Health Services of North Texas might consider becoming an accountable-care organization, but first it would need to attain the federally qualified health centers status.
Attaining that kind of status is the tricky part, he says. As a result of the faltering economy and budget shortfalls, only 67 clinics out of 800 applicants across the country were granted status as a federally qualified health center last year.
Health Services of North Texas was not one of them.
Aldridge noted that with limited resources, priority was given to clinics that serve large homeless populations or migrant workers, or that serve areas suffering from extreme rates of poverty.
“If the government gets more money for federally qualified health centers, we may have our application approved,” he said. “In the meanwhile, we have applied [in January] for look-alike status and we are operating under federally qualified health centers guidelines.”
Currently, only 64 centers exist in Texas, home to the nation’s highest rate of uninsured patients (24.1 percent), according to U.S. Census data.
Physician’s assistant Karishma Patel said if Health Services of North Texas attained the special status, it would be able to expand its services and care for more people. Currently, the clinic serves 1,500 patients per year.
“It’s what we want to establish here, by being a community medical home,” Patel said.“We want to be the one-stop place where we know you and can do everything for you.”
Much like the projected accountable-care organization, the clinic would provide everything from health screenings, counseling and referring to a network of specialists.
Within the past three months, the clinic’s patient load has expanded to between 40 and 60 patients on any given day. In seeking the “look-alike” designation, the clinic plans to seek additional funding and grants to add to the enhanced reimbursement for Medicare, Medicaid and Children’s Health Insurance Program — all in the hopes that the additional funding will carry the organization through the next few years of change.
“In the United States, we spend more on health care than even the socialist countries,” said Patrick Felicitas, a physician and the clinic’s chief medical officer. “We spend billions of dollars on health care, but the United States is still only 17th in the world as far as health goes. We are trying to address this situation by trying to establish a medical home for our patients.”
Since becoming a patient at Health Services of North Texas, Garrett has been quite happy with the care he has received.
“It is an unusual group, Health Services,” Garrett says. “Dr. Felicitas spent a considerable amount of time with me on the first visit and he listened to my background. He was polite and asked questions. I was very pleased at the way he handled me.”
In Garrett’s experience, that is the key to knowing if you have found a good doctor.
“If the doctor listens,” Garrett says, “then you are halfway home.”
Staff writers Karina Ramírez and Peggy Heinkel-Wolfe contributed to this report.
SERIES AT A GLANCE
SUNDAY: An overview of health care as it stands today. A look back shows reform isn’t a new concept. Results of Massachusetts reforms show unexpected results.
MONDAY: Small businesses react to new law. Reform spotlights need for faster results from research.
TUESDAY: Prevention is key to curing cost concerns. Workers with no insurance take health into their own hands.
TODAY: Physicians struggle to maintain their business model. Patients try “accountable care.”
THURSDAY: Texas lags behind other states in setting up insurance exchange, while reform banks on student loans.
FRIDAY: Mental health treatment remains fragmented, affecting physical health care. Texas county jails are primary provider of mental health services.