The critical thinker in me wants to know if there’s a difference between healthcare leaders believing that ACOs are an effective model and proving that they are in reality.
So much money is being spent by doctors and other organizers to build ACOs and other integrated health systems, implement expensive software, create new jobs for which people will base their home-buying and car buying decisions, marriages, decisions to have children, educational paths, and other significant life decisions tied to having a job they believe is secure. What if all that doesn’t prove out and those jobs go away?
We say this occur in the 1990s when that attempt at healthcare reform was abandoned. It was abandoned because once the doctors learned how to manage capitated risk, the health plan shareholders and boards of directors didn’t want to continue paying for upside risk. The job was done, the behavior was changed. Many people made a lot of money while others lost everything they had to poor contracts, bad decisions and inappropriate assumption of financial risk by contract, without adequate stoploss and reinsurance coverage to mitigate excess losses not covered by the capitated payments each month.
Back then we didn’t have all these expensive software applications and systems. If a group went “big time” they bought Fred Rothenberg’s EZ-CAP and spent between $10,000 and $50,000 to get it and install it. Most IPAs and PHOs ran with a lean staff of 3-5 people in their MSO, maybe one of which had a Master’s Degree, and the rest undergraduate degrees or none at all. Many groups didn’t spend a lot of money on consulting or actuaries, and as a result, didn’t maximize their potential as a business because they simply didn’t know what they didn’t know.
I see this potential looming out there once again. How will we turn theories into bankable realities this time? The risks are much greater because the sunk costs to establish and operate an ACO are many multiples higher.
Your thoughts?
