True physi­cian lead­er­ship key to sus­tain­abil­ity of ACOs

As we look to­ward a new year, the on­go­ing ac­count­able care ex­per­i­ment un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act still has some crit­i­cal unan­swered ques­tions:

Modern Healthcare - - COMMENT - By Dr. Robert Pearl In­ter­ested in sub­mit­ting a Guest Ex­pert op-ed? View guide­lines at mod­ern­health­care.com/op-ed. Send drafts to As­sis­tant Man­ag­ing Ed­i­tor David May at dmay@mod­ern­health­care.com.

How is it far­ing and what are the prospects for its fu­ture? Is this com­po­nent of re­form go­ing to be a sus­tain­able so­lu­tion that will im­prove qual­ity of care, ef­fi­ciency and cost-ef­fec­tive­ness?

To date, re­sults from Medi­care and com­mer­cial ac­count­able care or­ga­ni­za­tions—while not with­out chal­lenges and dis­ap­point­ments—are en­cour­ag­ing, par­tic­u­larly around their suc­cess in achiev­ing su­pe­rior qual­ity out­comes. But for the or­ga­ni­za­tions to re­al­ize their full prom­ise, at least two key changes will be nec­es­sary.

The first is il­lus­trated by a ques­tion I re­ceived from a me­dia out­let sev­eral weeks ago. The re­porter was seek­ing a per­spec­tive on the re­luc­tance of some physi­cians to ac­cept the fees var­i­ous health plans charged through the health in­surance ex­changes. I pointed out that even among the most ef­fi­cient prac­tices, the cost of de­liv­er­ing care must be ad­e­quately funded. When pay­ments are too low for physi­cians to de­liver qual­ity care and keep their prac­tices vi­able, there is no good so­lu­tion.

This prob­lem is com­pounded by the fee-for-ser­vice pay­ment method­ol­ogy. While ACOs might re­ceive pay­ment on a pre­paid ba­sis, the physi­cians and hos­pi­tals inside the ACO are of­ten still re­im­bursed based on vol­ume. As a re­sult, providers of­ten don’t have an in­cen­tive to work to­gether to find more ef­fec­tive ways to de­liver clin­i­cal care. And when pa­tients seek care out­side of the ACO, physi­cians are at fi­nan­cial risk for care that may be un­nec­es­sary or in­ap­pro­pri­ate. In con­trast, when pa­tients are seen by physi­cians inside the ACO, par­tic­u­larly when they are part of a mul­tispe­cialty med­i­cal group that shares a com­pre­hen­sive elec­tronic health record, the best qual­ity care can be pro­vided in the most af­ford­able ways.

The sec­ond area where change is needed is the struc­ture of many re­cently formed ACOs. The ACA pre­scribes some key char­ac­ter­is­tics of the ACO struc­ture and, based on the law, the CMS has de­vel­oped mul­ti­ple “tracks” that re­quire ACOs to move to­ward ac­cept­ing fi­nan­cial risk. Well-cap­i­tal­ized hos­pi­tals and in­sur­ers, there­fore, are in a bet­ter fi­nan­cial po­si­tion than smaller physi­cian groups to take the risk. This is why, as I noted in a re­cent Har­vard Business Re­view com­men­tary, hos­pi­tals in many newly formed ACOs have tended to be the lead­ers, with physi­cians in sec­ondary roles as chief med­i­cal of­fi­cers. Even in this type of foun­da­tion model, where the­o­ret­i­cally con­trol is shared, physi­cians of­ten feel rel­a­tively pow­er­less and strug­gle to com­mit fully to the goals of per­for­mance im­prove­ment and cost con­tain­ment. For this rea­son, the foun­da­tion model is flawed.

There is an al­ter­na­tive: the part­ner­ship model, which re­lies on shared lead­er­ship among hos­pi­tals, in­surance plans and med­i­cal groups. This leader- ship struc­ture im­proves col­lab­o­ra­tion among physi­cians, pro­duces higher per­for­mance and over­comes the ten­dency of doc­tors to try to max­i­mize their in­di­vid­ual com­pen­sa­tion. In this model, the med­i­cal group works with, not for, the hos­pi­tal or health plan and shares in the re­wards or penal­ties. Although the part­ner­ship model has not yet been tried at the new ACOs, it has al­lowed a va­ri­ety of es­tab­lished mul­tispe­cialty med­i­cal groups—such as those in my or­ga­ni­za­tion, the Coun­cil of Ac­count­able Physi­cian Prac­tices (in­clud­ing the Mayo Clinic, Kaiser Per­ma­nente, In­ter­moun­tain Health­care and Geisinger Health Sys­tem)—to achieve su­pe­rior qual­ity out­comes, pro­vide out­stand­ing ser­vice and in­crease af­ford­abil­ity.

Re­search pub­lished in jour­nals such as Health Af­fairs shows that physi­cians are be­gin­ning to take lead­er­ship roles in many ACOs, and where this is oc­cur­ring the or­ga­ni­za­tions are achiev­ing ex­cel­lent out­comes. But real physi­cian lead­er­ship means more than be­ing a CMO re­port­ing to a hos­pi­tal ad­min­is­tra­tor. It means that physi­cians are key de­ci­sion­mak­ers in set­ting strat­egy, man­ag­ing fi­nances and pur­su­ing qual­ity pa­tient­care out­comes. To ful­fill the prom­ise of ACOs, hos­pi­tals and health plans need to un­der­stand the value of true physi­cian lead­er­ship.

Are ACOs sus­tain­able? Only if we learn from the ex­pe­ri­ence of the cur­rent ACOs and cre­ate new mod­els for the fu­ture in which physi­cians feel com­mit­ted to pro­vid­ing true ac­count­able care to in­di­vid­u­als and pop­u­la­tions of pa­tients.

Dr. Robert Pearl is chair­man of the Coun­cil of Ac­count­able Physi­cian Prac­tices, an af­fil­i­ate of the Amer­i­can Med­i­cal Group As­so­ci­a­tion; CEO of the Per­ma­nente Med­i­cal Group, Oak­land, Calif.; and pres­i­dent and CEO of the Mid-At­lantic Per­ma­nente Med­i­cal Group, Rockville, Md.

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