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ACO Final Rules Intend to Encourage Consolidation

Philip Betbeze, for HealthLeaders Media, October 28, 2011

Much attention, deservedly, has been paid to the final accountable care organization rules released by CMS last week. My colleagues (mostly) and I (very little, so far) have expended plenty of time and effort breaking down the final rules and the consensus is that they're much more attractive to providers that in their previous iteration.

You can read a few unvarnished opinions from some of healthcare's most influential voices. However, many of these leaders also say that the revised rules still don't clear the hurdle to the degree that it's suddenly desirable to take on the investment risk necessary to go down the path of a Medicare ACO.

They fear change. They fear taking on risk. And perhaps most importantly, they fear that ACOs will represent another failed payment experiment from the federal government.

Perhaps healthcare leaders are also worried about their survival under any reimbursement scheme that has been so often revised and retooled. In some cases, early adopters have fared poorly from an ROI perspective.

But those are side issues. The fact is that many hospitals, especially of the standalone kind, will never be able to make a successful go of creating accountable care organizations under their current structure.

They can't survive while the inevitable problems with underfunding and patient and physician mobility are addressed—if they ever really are. Even the big systems, possessing contractual expertise, and the pieces of the care continuum under their ownership or contractual control, are concerned that ACOs, at least the government's version, have easily identifiable land mines that could render the experiment insolvent from their point of view.

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1 comments on "ACO Final Rules Intend to Encourage Consolidation"


R Daniel King (10/28/2011 at 3:51 PM)
Accountable care organizations will fail without accountable leadership starting with government. Five decades of Medicare and Medicaid price controls have caused all the negative characterisics of price controls: shortages (primary care physicians), excess (cardiologist), black marketing (drugs), organized crime (fraudulent billing), assault on civil liberties (a physician's freedom to charge a patient less than Medicare), lesser quality (IOM and HealthGrade reports)and the big one infalation. Historically, price controls cause universal inflation but cost shifting allowed Medicare to shift its inflation private insurers. Consequently, insurance premiums inflate at higher rates than Medicare making CMS look inefficient and private insurers inefficient and/or profit mongers. If "ACOs are a great common sense idea," then you have to accept bundled price controls will not fail where fee-for-service price controls did. The root cause to the US health care crisis is the leadership chasm at all levels. If we do not come to terms with this, a British op-ed will prove right, "the US will need to manage its decline." Health care leaders can either accept this or find the courage to usher in the goldern age of health care by becoming the force behind the most efficient delivery of quality, universal, integrated care. Government has failed to do this for half a century.