Want to Form A Physician-Led Accountable Care Organization (ACO)? Here's How

The Disease Management Care Blog is ashamed to admit that it didn't quite grasp that physicians could independently take the helm in Accountable Care Organizations (ACOs). Sure, physician-led organizations are named as potential entities in the Affordable Care Act (like "ACO professionals in group practice arrangements" as well as "networks of individual practices of ACO professionals"), but it wasn't until the DMCB read this report from the Center for American Progress that it thought it could really work. The title is "Achieving Accountable and Affordable Care" and its authors are Georgetown's Judy Feder and Harvard's David Cutler.

The DMCB thinks of this as a physician road map.

Drs. Feder and Cutler favor the testing of "physician-led accountable care groups" alongside hospital-led ACOs. They point out that hospital dominated systems have a pattern of using their size to fend off attempts at real reform, while simultaneously using their owned/employed physicians to secure referrals, capture specialty revenue and squeeze insurers for higher payment rates. They also note that past large hospital-doc alliances have often not lived up to the promise increased efficiency or provided savings; in fact, employed physicians turn out to be less productive compared to their private practice colleagues. In contrast, they note, independent physicians are more likely to force hospitals to compete for patients instead of just cornering the market.

As evidence of physician success, they point to the Physician Group Practice demo (see page 10 of the report). It found that independently functioning physician groups can develop their own systems that efficiently move patients through the care systems that, in turn, reduce hospital expenses.

How could CMS promote the formation of physician led ACOs? According to Feder and Cutler, the Agency should:

1) emphasize outcome metrics that rely on high levels of physician engagement such as readmissions or hospitalizations for ambulatory care sensitive conditions;

2) provide technical and expert support to physicians groups that apply to form ACOs;

3) promote Patient Centered Medical Homes in the ACO regulations and get the Center for Medicare and Medicaid Innovation (CMMI) to complement the effort with the promotion of this and other physician-led care initiatives.

4) look for ways to get organizations that consist of multiple small practices involved as ACOs; one way to connect the the clinics would be with "certified care management companies" (see page 13 of the Center for American Progress Report).

5) offer loans to enable investment in practice redesign

The New England Journal has also weighed in on the topic. This article by Robert Kocher and Nikhil Sahni discusses what could get in the physicians' way of ACO leadership:

1) docs will need to closely collaborate on clinical pathways and the allocation of resources, something that they're less likely to do in business settings (though that's changing);

2) docs will need to invest in information technology, administrative managers and overhead and finally

3) docs will need to ignore those bad memories of failed capitation models and get used to taking on some risk.

They also point out that in addition to battling hospital dominance, they may also be needlessly distracted by declining FFS payments and trying to preserve their old referral "paths."

The DMCB would add that other ingredients for successful physician-led ACOs are strong leadership, shared vision, data sharing, provider feedback and accountability, a culture of teaming, being able to "trend" thanks to strong HIT support and investing in intellectual capital.

More on that notion of intellectual capital in a future post.