Tuesday, April 10, 2012

The Lessons from the Book Merger Games (and a DMCB Review In Health Affairs)

The Disease Management Care Blog is a sucker for apocalyptic cinema and books. Exploding continents, relentless lava flows, world war, lethal pestilence, and the collapse of civilization draws the DMCB faster than a horde of heartless Republican vampires to a Democratic child day care center. Watching the reruns in the living rooms are the best, since the DMCB knows when the dull parts are and can use the down time to a) fetch food and b) irritate the DMCB spouse with its insights on what happens when the Earth's magnetic poles reverse or how viruses can infect anytime and anywhere.

Maybe that's why the DMCB's reading about the collapse of Allegheny Health and Research Foundation (AHERF) in Merger Games was perfectly bracketed by the zombies of 28 Days Later and California 's spectacular slide into the sea in 2012. Author Judith Swazey's description of AHERF's rise and fall is a remarkable retelling of a tale of exploding assumptions, relentless hubris and lethal mismanagement that led one of the darlings of the 1990's-style health reform to collapse and go from hero to zero.

Which is especially timely, because CMS has just announced which health care organizations will be participating in its Accountable Care Organization (ACO) program. These 27 participating institutions have all the ingredients for their own versions of apocalyptic cinema: survival will be a function of savings, not revenue; local competitors without the constraints of shared savings aren't going away, hospital-physician synergies may prove to be elusive and the Medicare beneficiaries themselves have no incentives to reduce utilization.

The DMCB hopes against hope that these organizations succeed and it never has to break out the health-horror 'Apocalypse' Care Organization film popcorn. For that reason, it recommends someone in a senior leadership position in each of CMS' Shared Savings programs takes the time to read Merger Games.  The book contains important lessons on just how vulnerable big health care systems are to utilization assumptions, fickle politics, shifting health policy making and a belief that "size matters." The book is important reading for anyone who hopes that "coordinating" a regional network of hospitals and clinics with a mix of revenue and savings assumptions will inevitably lead to higher quality and lower cost.

You can read the DMCB review of the book appearing in this month's issue of Health Affairs here. In addition, there's a good overview on AHERF published 12 years ago here.

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