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Physicians Shut Out of ACOs Seek to Merge Practices

Greg Freeman, June 12, 2013

The PPACA is pushing healthcare providers and payers to partner more, so collecting and analyzing data on your practice performance will be more important than ever, Fanburg says. You may be competing with other practices for inclusion in the best ACO, so you will need to be able to show that you can deliver high-quality care at a lower cost than other practices.

"The practices that are effective with collecting and analyzing that data will be able to negotiate stronger contracts that help stem the tide of increasing insurance premiums and at the same time make the doctors and hospitals accountable for the wrong decisions," Fanburg says.

In some areas, however, hospitals will be competing for practices. Depending on the geographic area and demographics, there might be three or four hospitals competing to dominate the market, Fanburg says.

"If that is the case, they will be bidding up the acquisition price for practices against either other hospitals or multispecialty groups," he says. "That's where you want to be, but that's either already your situation or you can't change it now."

Watching the trends in your area is important, but Fanburg cautions that you can't blindly follow others in lieu of doing your own research and making a decision that fits your own practice. Fanburg recently worked with a colorectal surgery practice that was considering a new contract to join a hospital system, and when he asked why they were thinking about the move, the response was, "Because everyone else is doing it."

"I told them they need a better reason than that, but they don't really," he says. "Hospitals can still pay doctors more than what they would get under the existing fee schedule, but these arrangements are very short-lived. What happens three, four, or five years from now when these employment contracts expire? Either they're going to terminate the relationship or they're going to renegotiate a much lower rate."

Many practice leaders respond that they'll just wait and figure out that problem later.

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