Hospital vs. Physician Control of Accountable Care Organizations: Here's One Way To Tell Who Is In Charge

As the Disease Management Care Blog types this, countless health care administrators, consultants, chairs, deans, managers, C suite denizens and actuaries are logging countless hours getting ready for the Accountable Care Organization (ACO) gold rush. Think they're going to worry about "coordination?" Write countless memos extolling "quality performance goals?" Create business plans that are centered on "controlling costs and increasing quality?" Think again, says the DMCB. What they're really going to focus on are the power and revenue-sharing arrangements between the physicians and hospitals.

The DMCB has a small yet compelling anecdote to put this into perspective. In its earliest years as a physician "revenue center," it notified patients of their test results by picking up a handset in its office and dictating a quick letter. It took less than a minute. The letter got typed, reviewed, signed, folded, enveloped and sealed with little additional DMCB attention.

As the years progressed and its role shifted toward being a provider "cost center," the DMCB gradually assumed more of the mundane tasks of routine patient communication. Its transition to maximum operational efficiency reached its zenith with the arrival of an electronic health record (EHR) with pre-formatted letter templates. Thanks to the wonders of highlighting and clicking, the necessary text could be assembled into a letter, which was then printed at the DMCB's shared work station.

The DMCB was not impressed. While costs had certainly dropped somewhere in the organization, this unholy alliance between health information technology and the administration had ironically led the DMCB to spending more time dealing with patient letters.

You don't need to take the DMCB word for it. Check out this oft-quoted article from Health Affairs that shows how the $44,000 up-front cost of an EHR installation was offset not only by upcoding but by fewer non-physician personnel and transcription savings (look for Exhibit 2). Given the relentless pace of health care cost inflation and the voracious appetite for capital, the DMCB thinks it's highly unlikely that any of the savings made it back to the physicians or their patients in the form of higher remuneration or lower prices.

Years from now, when DMCB goes walking through the ACOs' hallways trying to figure out how things are working, it will be closely examining the physician workstations. If it sees cheap printers with stacks of outbox letters, it will know who won the physician-hospital ACO tussle.

Image from Wikipedia