Physician Alignment Poses Challenge for ACOs

John Commins, July 12, 2011

Physician alignment and incentive challenges could prove to be a major hurdle for healthcare providers who want to take part in accountable care organizations.

Richard C. Johnston, MD, an internist with Dallas-based Medical Clinic of North Texas, says hospitals will find ACOs to be a tough sell for skeptical physicians.  "The main stumbling block in physician integration is alignment of incentives. That, and who controls the dollars. Who does CMS write the check to?" Johnston tells HealthLeaders Media

 "Since most of the savings in the ACO comes out of limiting hospitalizations and ER visits and readmissions, there is a natural conflict there. If hospitals start to have their reimbursement cuts and if their admissions fall it is going to be difficult to sustain their infrastructure. So, who gets the money and distributes it," he says. "If the hospital is getting the money I would think they would probably try to protect their profitability first and the physicians would be left out there."

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A recent survey of 882 hospital administrators and physicians by recruiters AMN Healthcare found that 42% said physician alignment was the most serious obstacle to forming an ACO, followed by a lack of capital (38%), a lack of integrated IT (31%) and a lack of evidence-based treatment protocol data (25%).

David A. Spahlinger, MD, a senior associate dean for clinical affairs at the University of Michigan Medical School, says he's not surprised that physician alignment is becoming a sticking point.

"Yes there are some capital investments you have to make for IT and there are staffing issues, but in the end it's really the alignment of the parts in how we are going to care for patients," he says.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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