"If we can’t go in and help a practice grow and help the physicians from a compensation perspective to remain whole or enhance their economics, and if we can’t establish a retained earnings model, then we shy away from those types of deals. We do not create profitability at the expense of physician compensation."
One of the criticisms of healthcare-provider consolidation is that it leads to higher unit pricing for medical services. DuPage’s consolidation strategy has held the line on pricing, Kasper says. "We are the lowest-cost ACO in the Chicagoland area. We are top-quartile performance in cost, and we are roughly top 10 performance in quality based on MSSP quality metrics."
DuPage is a member of Illinois Health Partners, a Medicare Shared Savings Program accountable care organization. For the 2015 MSSP performance year, data from the Centers for Medicare & Medicaid Services show Illinois Health Partners posted a $8,847 cost of care per Medicare beneficiary, which was the lowest figure in the Chicagoland area for any MSSP ACO.
As cited in the September 9, 2016, Health Affairs Blog, for other ACOs earning MSSP shared savings payments in 2015, the average cost of care per beneficiary was $10,555 nationwide.
Health systems and hospitals generally pursue an inpatient-driven model when acquiring physician practices, which helps drive higher-patient costs, Kasper says.
"We are an outpatient-driven model. When physicians join a hospital, those physicians use the hospital for imaging, for labs, and for outpatient services. All those services go to the hospital, and any insurance carrier will tell you it is more expensive to use hospital services than it is to use freestanding outpatient services. As we build out our capabilities and add physicians and patients to our model, we bring down costs almost effective immediately."
Gazing into the healthcare-provider consolidation crystal ball
Senior leaders at DuPage say their physician-practice consolidation strategy can be replicated across the country.
"There are three strategies: the publicly traded companies that are in the physician-practice space; there are the health systems and hospitals that are in the space; and there are very few physician-driven models, especially those that are willing to take their model outside of their local market, which we are willing to do. There is a real opportunity for DuPage Medical Group to become a regional or national company, and to help create some alternatives for doctors," says Kasper.
Christopher Cheney is the senior clinical care editor at HealthLeaders.