Tuesday, May 17, 2011

Accountable Care "Smackdown" Part III

The feds fight back - Yes We Can!

From modernhealthcare.com today, Berwick interview:


Accountable Care "Smackdown" Part II

While the feds were developing regulations for Medicare ACOs, both the feds and the American Hospital Association were developing cost numbers for ACO start-ups.

Today the AHA published its preliminary numbers, listing 23 major competencies to form and operate a hospital-based ACO (the AHA has been generally supportive of reform efforts, seeing a grim future).

The AHA costs estimates ranged from 600% and 1400% higher than the DHHS-CMS estimates. Both estimates are preliminary, but that is a huge difference. In my opinion (without deep analysis) the federal estimates have the substance of cotton candy.

On the list of 23 competencies, some were for formation only but most for formation and operations (my own list was 13 major competencies for on-going operations). The ACO is a very complex business model.

If ACOs do not fly, the major objectives of PPACA (Obamacare) will be difficult if not impossible to achieve.

Friday, May 13, 2011

Accountable Care "Smackdown"

The American Medical Group Association represents about 400 very large and sophisticated multi-specialty physicians groups, such as the Cleveland Clinic group and Intermountain (Utah) group.

The Obama administration had counted on these groups to be the first to create Accountable Care Organizations (ACOs), starting with Medicare ACOs in 2012 and then moving to full service ACOs. These groups were more likely to have the resources necessary to start an ACO.

On Wednesday the group announced probably 90% of its members would not participate, because the draft regulations issued March 31st were too prescriptive, too operationally complex, the move to risk sharing is too quick, the gatekeeper and risk management capabilities requirements too much, and the time lines too short. The AMGA consensus is the chance of success is close to zero, so why waste resources.

If the big 400 cannot chew through this and come up with a workable plan, neither will other physician groups. Based on our recent conference attendance many provider organizations are taking the slow down approach.

It appears today only very large very integrated systems owning all of the necessary providers will be in the first wave. This could change for the better, but we doubt it. This could change for the worse though.

Not enough ACOs, no significant cost savings with quality improvement, no deficit improvement, train wreck.