Healthcare Reform Then, and Now

"Another thing that's different is that when we went through the HMO era, we had insurance companies setting up rules that would govern and restrict certain procedures and tests," he says. "The docs were constantly bumping up against preauthorization."

This time, he says, management has a better understanding "than 20 years ago about the usefulness of those modalities. So we're in a better position with physicians who make decisions about what's appropriate utilization."

The second difference is in the organizational structure of ACOs, he argues.

"If you operate them correctly, you have physician leadership devising the criteria on which we will base the appropriateness of those things rather than coming out of the black hole of an insurance office," he says. "Time will tell if it will succeed, but I'm hanging hopes on that."

Whether such an investment in transformation makes sense for many hospitals and health systems is linked to whether the investment in such new roles and care structures will ultimately justify the cost.

"The answer is yes and no," says Wallace. "The critical issue is timing for most hospital executives. The majority of healthcare leaders, unlike the majority of physicians, know that this is going to happen. What today is a revenue generator tomorrow is a cost center."