Thursday, April 29, 2010

Accountable Care Organizations: Physician Group Competition, Divided Loyalties, Monopolies & the Risk of Abandonment

The Disease Management Care Blog gave a one hour Category 1 continuing medical education lecture to an independent, very large (more than a hundred providers), multi-site and physician-owned primary care group the other day. It had a chance to chat with the practice administrator and it learned a) recruiting physicians is their biggest challenge, b) once a young physician is recruited, it takes months for him or her to become efficient enough to cover salary and benefits, c) fee-for-service Medicare is their problem payer, d) there is a direct economic link between the money they get from private insurers' pay for performance (P4P) and their willingness to provide disease management: no P4P, no DM, e) they do business in the same core service area as a very large integrated delivery system and are thriving and f) they admit or refer patients to two hospitals.

Each point was savored during the car ride home, but it was the last insight above on two hospitals that dredged up some additional questions about a DMCB favorite: acountable care organizations (ACOs).

It's the end of the week, so the DMCB will keep it brief.

As hospitals respond to health reform and seek to form ACOs, how will they and/or the Federal regulations that govern all of this.....

1) overcome the triple threat of i) large physician owned groups' competitive activities, ii) provider unwillingness to be on call for emergency room consultations/admissions and iii) that many outpatient-based physicians can't recall what the inside of a hospital even looks like, let alone have a business relationship with one?

2) deal with large physician groups that can play one hospital against another?

3) ease inevitable government anxieties that ACOs are really monopolies in health reform's clothing?

4) keep hospitals, if things don't work out as planned, from pulling the plug and leaving large and small physician groups to claw their way back to financial independence?

1 comment:

Devon Devine, JD said...

In California, on April 15th we got a very pro-plaintiff antitrust decision. First, it is the only decision that I'm aware of in the 9th Circuit squarely holding that individual doctor members of an independent practice association are independent economic entities who can conspire with one another for purposes of Section 1 of the Sherman Act. Second, it now becomes the second decision in this Circuit (at least on the pleadings) to hold that doctors and a hospital for which they provide medical services pursuant to contract can be sufficiently economically distinct entities to conspire for purposes of Section 1 of the Sherman Act. Note that the second holding must be read very carefully. The Court says only that whether doctors and hospitals are sufficiently independent to conspire is a factual determination on the facts as alleged, citing the only 9th Circuit case to consider the issue. In the process, the Court distinguishes cases from outside the 9th Circuit holding that hospital staff physicians are not sufficiently economically separate from the hospitals in which they serve to support a Section 1 claim.