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Incentives, Motivations Clash Under ACOs

Philip Betbeze, for HealthLeaders Media, April 26, 2013

The research report (registration required) doesn't answer the question of how senior leaders can be expected to grow their organization, its revenues, and its profits while at the same time decreasing the cost of care. It does provide some hard evidence that in some cases, healthcare leaders must serve not only two, but many masters.

Of course, I'm talking about the different ACO constructions that are proliferating. One of the conclusions of the research is that commercial ACOs place greater focus on the areas of cost reduction and ambulatory process, while Medicare ACOs emphasize quality outcomes.

These findings get at what I've been questioning for some time as a fundamental problem with the ACO structure at the operational level. It's paralysis not by analysis, but by rules. How can you have one process that would be optimal for one payer at the expense of the other payers with which you have ACO contracts?

If the answer is you can't, then how do you prioritize?

For some answers, I talked with Ken Perez, a MedeAnalytics' senior vice president and director of healthcare policy. He says the reality is that senior executives are making a choice here. Largely, they're choosing to serve only one master at a time, at least until they feel they've got this value-based purchasing challenge figured out with one payer.

"If you're a rational decision maker, you figure out your Medicare share, and whether it's below average," Perez says. "If it's 20% of your business, you care about it, but maybe not as much."

In other words, maybe in that example, you're not interested in an ACO construct from CMS.

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