Risk and the ACO

Philip Betbeze, for HealthLeaders Media , June 13, 2011
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Editor’s note: This piece is based on Philip Betbeze’s April 22 online column, “ACOs Generate High Interest, but Is Bar Set Too High?” To see the column, visit www.healthleadersmedia.com, click on the Leadership tab, then the Leadership Corner link.

Aric Sharp has more than 15 years of experience running large multispecialty physician groups in the Midwest, and although he and his physicians are excited about the possibility of becoming an accountable care organization, they are probably not going to undertake the time and investment necessary to achieve it.

Why not? Sharp says as the proposed rules are written now, making the jump to an ACO model as defined by CMS represents a bridge too far. “We have a strong interest in being a part of an ACO and yet with the way the rules were set, our interest is diminished,” he says.

Let’s look at this a little further, because if Quincy Medical Group, a 130-physician multispecialty clinic in Illinois isn’t interested, the government might have a problem on its hands as it tries to reshape how healthcare is provided and paid for.

QMG seems a perfect candidate to implement an ACO. It is independent, has a catchment area of about 300,000 patients, and from Quincy—about two hours north of St. Louis—reaching anything other than a critical access hospital requires a couple hours’ journey in any direction.

Sharp is QMG’s CEO, and he admits to having read—skimmed in some places—all 429 pages of the regulations. He was very interested in participating until he started thinking about risk and when his organization will be ready to take on that puzzling part of the ACO equation. That’s what’s giving him pause.

According to the proposed regs, ACO hopefuls can apply to enter the program with downside risk immediately or after the second year. But Sharp says that unless an organization has a fair amount of experience designing and dealing with risk, that’s a difficult sell because “the infrastructure for many markets won’t be there by year three.”

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