To Be An ACO, Or Not To Be
Though there will be some cost savings afforded to ACOs, the overall financial benefit to participants of an ACO is still cloudy. Financial leaders don’t do well with “cloudy” when it comes to numbers, which is why many healthcare leaders haven’t been quick to support this initiative. Nevertheless, under the heading of “he who hesitates,” it may be time to look into participating in an ACO, so you don’t miss out on future market share opportunities.
In another New England Journal of Medicine article, researchers remark that the power struggle between physicians and hospitals will only heat up as ACOs come online. The article’s authors suggest that those who make the first move will control ACOs in a local market for many years into the future.
The authors write, “If physicians come to dominate, hospitals’ census will decline, and their revenue will fall, with little compensatory growth in outpatient services, since physicians are likely to self-refer. This decline will, in turn, lower hospitals’ bond ratings, making it harder for them to borrow money and expand. As hospitals’ financial activity and employment decline, their influence in their local communities will also wane. And it will be hard for them to recover from this diminished role.
“Conversely, if hospitals come to dominate ACOs, they will accrue more of the savings from the new delivery system, and physicians’ incomes and status as independent professionals will decline. Once relegated to the position of employees and contractors, physicians will have difficulty regaining income, status, the ability to raise capital, and the influence necessary to control health care institutions. Therefore, the actor who moves first effectively is likely to assume the momentum and dominate the local market.”
While the thought of losing market share is often enough to stir healthcare leaders into action, there’s a very important challenge to also consider—the legal, antitrust ramifications of ACOs. The new ACO antitrust guidelines indicate that CMS, the Federal Trade Commission, and the Anti-Trust Division of the Department of Justice will all be closely monitoring these organizations. Just getting approval by CMS to launch an ACO may be very time consuming, and may make it more trouble than it’s worth for some hospitals and health systems.
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