ACO Final Rules Intend to Encourage Consolidation

Philip Betbeze, 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.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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