FLAACO? What’s That?’

by Gregg A. Masters, MPH

First there was section 30222 prescribed by the Patient Protection and Affordable Care Act (“ACA”), which added section 1899 to the Social Security Act that requires the Secretary of Health and Human Services to establish the [Medicare] Shared Savings Program (MSSP), see: ‘Summary of Final Rule Provisions for Accountable CareOrganizations under the Medicare Shared Savings Program‘.

Leading up to and continuing to this day is a literal potpourri of aligned industry stakeholders and interests who support this emerging ‘new, new thing‘. From the ACO Congress to the ACO Summit and a host of others including the National Association of Accountable Care Organizations (NAACOs) and most recently the ACO Coalition forged by principals at The American Journal of Managed Care (who launched a sister publication the American Journal of Accountable Care) they advocate for and provide both networking opportunities and continuing education into best practices for these nascent entities on which much of the success of the ACA is vested.

ACOs, a once ‘DOA’ (dead on arrival) too little too late or ‘HMO-lite’ model version, seems to be working it’s way into not only the lexicon of managed competition via a growing body of endorsements and reported outcomes data by many both in the public (CMS) and private (Aetna, United, Blues plans, etc) sectors as the preferred mechanism to implement the vision of the triple aim and fuel the transition from volume to value based medicine.

Like much of its era-specific innovation industry predecessors HMOs, PPOs, EPOs, OWAs), i.e., greasing the skids for if not enabling the HMO industry migration beyond the limited appeal of staff models to mainstream medicine penetration via Independent Practice Associations (IPAs), and later followed by the growth and penetration of PHOs (physician hospital organizations), ACO ‘enablers’ (as well as this value based platform) seem to be here to stay.

Enter the Florida Association of Accountable Care Organizations (“FLACCOs”) led by former health plan executive Nicole Bradberry (for context listen to interviews with Nicole here and here), which holds its annual conference in Orlando, Florida October 1 & 2nd 2015.

FLAACOs Orlando Conference

The agenda is packed with entrepreneurs and operators in the space from ACO enablement companies including Aledade, to ACOs and vendors who support their risk readiness assessments if not assumption such as RowdMap. Aledade founder and CEO Farzad Mostashari, MD will keynote (see: ‘Former ONC Director Farzad Mostashari, MD Launches @AledadeACO).PopHealthWeek-logo-TWTTR-sq (2)

For the FLAACO agenda, click here and the list of participating faculty click here.

This year my colleague and co-founder of PopHealth Week (formerly, This Week in Accountable Care) Fred Goldstein and I will broadcast live from the event.

If you are not following FLAACOs and are interested in the road to accountable care, you may want to take note and perhaps even consider attending this gathering.

Health Insurance Industry Consolidation: Any ‘Qui Tam’ Exposure?

by Gregg A. Masters, MPH

If you’re a health policy junkie like me, then the best show in town (or anywhere for that matter) was in the Dirksen Senate Office Building in Washington, D.C., where HMO industry veteran and Chairman, President and CEO of Aetna Mark T. Bertolini and Anthem President and CEO Joseph R. Swedish among other industry stakeholders testified before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on health insurance industry consolidation, for video replay click here or watch below:senate hearing health insurance industry

As most of you reading this blog know, subject to the Department of Justice review Aetna will acquire Humana, and Anthem will acquire CIGNA. Thus, the submitted testimonies and ad hoc answers to sitting Senators on the Subcommittee were potentially a high stakes exchange.

Moreover, the hearing today was nothing short of a tutorial into the dynamics of the managed competition marketplace (both theory and practice since absent complete transparency assuming the salutary benefits of such competition may be more ‘wishful thinking‘ than reality as noted by Senator Blumenthal – CT, the home of the insurance industry) and whether this unique American strain of public/private collaboration can deliver on the oft repeated promises of such integration, i.e., that scale via consolidation drives operating efficiencies, improves quality and lowers costs to end users. We shall see…

As I heard the pitches from the various representatives assembled to offer perspective to the sitting Senators (see list here), I began to wonder if any of their testimony would be subject to the ‘false claims Act‘ if post consolidation the promised benefits do not accrue to the intended benefactors.

For those of you not familiar with the ‘False Claims Act‘ or otherwise known as Qui Tam filings, here a summary including its recent expanded scope via the Affordable Care Act:

The False Claims Act, expanded by the Fraud Enforcement and Recovery Act of 2009, P.L. 111-21 (S. 386), 123 Stat. 1617 (2009), now proscribes: (1) presenting a false claim; (2) making or using a false record or statement material to a false claim; (3) possessing property or money of the U.S. and delivering less than all of it; (4) delivering a certified receipt with intent to defraud the U.S.; (5) buying public property from a federal officer or employee, who may not lawfully sell it; (6) using a false record or statement material to an obligation to pay or transmit money or property to the U.S., or concealing or improperly avoiding or decreasing an obligation to pay or transmit money or property to the U.S.; (7) conspiring to commit any such offense. Additional liability may also flow from any retaliatory action taken against whistleblowers under the False Claims Act. Offenders may be sued for triple damages, costs, expenses, and attorneys fees in a civil action brought either by the United States or by a relator (whistleblower or other private party) in the name of the United States.
If the government initiates the suit, others may not join. If the government has not brought suit, a relator may do so, but must give the government notice and afford it 60 days to decide whether to take over the litigation. If the government declines to intervene, a prevailing relator’s share of any recovery is capped at 30%; if the government intervenes, the caps are lower and depend upon the circumstances. Relators in patent and Indian protection qui tam cases are entitled to half of the recovery.

Not sure if qui tam consideration can or even remotely applies to the upside representations proffered in favor of the acquisitions, since as noted by one or more witnesses today much of the empirical (public) record is incomplete and inconsistent with respect to supporting or discounting the arguments that will or have been made to DOJ as they conduct their anti-trust investigation into the proposed acquisitions or mergers.

[Editor’s Note: Two examples of previous health insurance industry consolidations were noted, including Aetna’s 1999 acquisition of PruCare, and United Health Group’s acquisition of Sierra Health Services. I will post the submitted witness testimony once it becomes available online, including any current discussion ‘tea leaves’ of what and where the DOJ investigation may be headed in both transactions. If you have anything, please feel free to add in comments section.]

This Subcommittee hearing is rich with both fundamentals and nuance considerations of the Affordable Care Act and whether it’s many moving parts can indeed align to meet the legislative intent of its authors.

Stay tuned!

Another Milestone Marker in Favor of the ACO Model?

by Gregg A. Masters, MPH

I awoke this morning to an email from a PR rep who supports outbound news for one of the emerging ACO management companies enabling physician led participation in the Medicare Shared Savings Program (MSSP) aka Aledade (@AledadeACO).

I then copy, pasted and tweeted the headline: ‘Aledade Creating New Medicare Accountable Care Organizations in Seven States.

I usually ignore ‘PRs’, yet this announcAledade newsement is material as it lends support via a growing body of evidence on the viability of the ACO model and its enabling ‘consciousness’ if not ‘sentiment shift’ in the prevailing market narrative.

While some still slam the ACA – and by proxy it’s ACO ‘workhorse’ – via relentless yet ‘diminishing returnsimpact of the ‘government takeover‘ fear mongering fueled by strategically sourced oppositional research, there is a building steady body of evidence supporting both the model and the broader context of efficacy of the competitive dynamics the ACA has unleashed on the stewards of our at risk (some say collapsing) healthcare economy.

Ergo my tweet:

Aledade news tweet

Ever since the Senate Finance Committee took up the debate and relentless series of ‘amendments‘ proffered by the ‘Rs’ trying to ‘improve‘ the proposed legislation that eventually emerged as the Patient Protection and Affordable Care Act (I NEVER use the pejorative term ‘Obamacare’), I’ve been a voice in the narrative of trying to get the facts of competitive market dynamics into the post political conversation around reforming our complex healthcare economy.

This is no easy task as the complexity of both the political process and objective reporting of how legislation becomes law including its contextual historical narrative is addressed in ‘A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History.

A challenge recognized upfront via admittedly ‘apolitical’ or ideologically agnostic ‘law librarians’ (yeah, you know those agenda driven bullies):

“Using the health care legislation passed in 2010 as a model to show how legislative procedure shapes legislative history, this article posits that legislative procedure has changed, making the traditional model of the legislative process used by law librarians and other researchers insufficient to capture the history of modern legislation. To prove this point, it follows the process through which the health care legislation was created and describes the information resources generated. The article concludes by listing resources that will give law librarians and other researchers a grounding in modern legislative procedure and help them navigate the difficulties presented by modern lawmaking.”

Since social media was starting to pick up in 2009 – 2010 time-frame, and given the angst associated with the public’s consumption of the ACA, I started ACO Watch and latter the hashtag #healthreform to track tweets associated with ACA consideration.

None-the-less, 5 years later the disinformation campaign persists though some of the pieces of the ACA are starting to show some promise of the law’s original intent. ACOs often referred to as a flawed model, perhaps an ACO lite if you will or too little too late to make a difference, the emerging datasets (both government and private market tea leaves) are building a case that the law is working.

Tomorrow on PopHealth Week, join my colleague, co-host and co-founder Fred Goldstein as we chat with Aledade Founder and CEO Farzard Mostashari, MD. This month we’re conducting a series on Population Health and ACOs talking to leadership from each ACO type: physician led, hospital sponsored and health plan enabled.

Listen here! We’re live 12 Noon Pacific/3 PM Eastern, and on demand thereafter.

The @Aetna and @Humana Marriage: Will It Be Different This Time?

by Gregg A. Masters, MPH

Wow! Ahead of the 4th of July weekend Mark T. Bertolini (@mtbert) and Bruce D. Broussard (@BruceDBroussard) both savvy and seasoned managed health care industry players and visionary captains at @Aetna and @Humana respectively, announced their marriage via a $35 billion, see Bloomberg story: ‘Aetna-Humana Deal to Lower Consumer Costs, CEOs Say deal. aetna humanaYet the initial market reaction to this presumptive value added union has been somewhat of a Vulcan mind mood disappointment.

When the Bloomberg reporter Betty Liu inquired about the initial (and continuing as of the date of the post) bearish investor response to the transaction, Bertolini posited:

‘I don’t think its all investors Betty, I actually think it’s the ‘Arbs’ (arbitrageurs) that got in the deal looking for opportunity and I’m not quite sure they know how to do this trade.  This is a longer term strategy. This is a very big combination that is going to have a longer term impact on the quality of healthcare, the cost of healthcare in an evolving consumer marketplace [emphasis mine, more later].. once the noise settles down we’re going to do just fine.’

Then the billion, perhaps trillion dollar question was lobbed to Broussard via Liu:

‘Ok Bruce so is it going to lower healthcare costs for consumers?’ 

To wit the Humana chief noted:

‘very much so, I think as you see the transition from a more employer based to a consumer based model and a value based reimbursement model from a fee-for-service model, these combined organizations will have the capability to meet both of those trends. Both in the way of our clinical capabilities on the Humana side and the deep, deep employer relationships that Aetna has on their side.’

Now lets step back a minute and first breathe in this fact: no-where in evidence has the aggregate cost of healthcare, nor health insurance premiums as proxy, declined (except for a brief period in the 90s when the medical care cost (MCC) index actually fell temporarily into negative territory), then as risk was pushed back by providers to the health plans, resumed their inexorable movement UP. So on a trend basis, health care costs ALWAYS rise as a multiple of CPI. Only recently has that rate of growth fallen from high single or the double digit rate of increases witnessed historically to low single digits – perhaps due more to the economic meltdown (declining demand and higher deductibles/copays) than any proactive contribution via improved health plan clinical risk management, direct or delegated.

Yet in offering documents filed with the SEC and investors as to the rationale for the combined company merger that ‘benefit’ is always posited as an outcome of the transaction. We always hear about ‘scale’, ‘operating efficiencies’ and even better management as a byproduct of the combination.

Secondly, some ‘de-coding’ is in order here. Both Bertolini and Broussard two men I admire as exemplary disruptor’s of ‘legacy healthcare’ inertia, i.e., Bertolini grew up in the HMO industry back in the day when even though his experience was forged in the for profit side of the business, it was none-the-less a mission oriented member focused sector (more MHAs, MPAs, and MPHs than MBAs) much like the community based operators in the non profit sector (RIP).

Broussard on the other hand is not your typical health plan executive as his roots are forged on the provider side with senior roles as U.S. Oncology (the successor to Physician Reliance Corp and ‘TOPA’ Texas Oncology, P.A.), Sun Health (the hospital group) and Continental Medical Systems (a rehab company). So his zeitgeist is firmly rooted in the provider culture with which his company buys, contracts for or joint ventures with to bring products to market.

Now back to the ‘code phrases’ used as rationale outlined for the inked merger/acquisition. Bertolini referred to ‘an evolving consumer marketplace‘ which means as more costs are shifted from the plan (Aetna, Humana and all other health plans writ large) to the member or insured, we (the consumers) will demand more ‘accountability’ from the provider world and thus somehow restrain aggregate healthcare costs via transparency tools or so called ‘skin in the game’ as a result of the shift to ‘consumer directed’ (i.e., high deductible) health plans.

This strikes me as a somewhat disingenuous argument bordering on perhaps naiveté (though it is highly unlikely that this characterization can stick to either of them). But ask yourself, if Aetna, Humana, United, Anthem or the member licensees of the Blue Cross and Blue Shield Association as aggregate wholesale buyers of hospital and physician services, leveraging millions of members or ‘covered lives’ (insurance speak), backed by seasoned provider contracting staffs can’t restrain the cost of healthcare, how can an ‘app empowered’, health literate enabled retail ‘shopper’ (you and me) for health services do better? I don’t think so… There is just too much of a power differential to overcome not to mention eco-system complexity to navigate ‘digital empowerment’ promises notwithstanding. Whether, ’empowered or not’, we are generally ‘screwed’ with more or less support from our ‘friends’ at the health plan if we’re lucky enough to be insured.

The second but related theme was outlined by Broussard:

‘as you see the transition from a more employer based to a consumer based model and a value based reimbursement model from a fee-for-service model’

The two strands here are movement from the employer sponsored model which retains some vestiges of ‘defined benefits‘ at least for union negotiated plans, to a ‘consumer based model‘ more akin to the ‘defined contribution‘ practice of limiting the plan’s liabilities by capping what it pays for on behalf of its members or insureds. The kicker and perhaps ‘game changer‘ here is the near unanimous recognition in the health wonk, including health plan world that fee for services medicine is a burning platform on a dying paradigm – yet, arguably 80-90% of the money in the healthcare eco-system today remains in a predominant FFS book of business – HHS Secretary Burwell’s value based healthcare announcement notwithstanding) so don’t hold yer breath.

So there you have it. Will it, can it be different this time? Can two demonstrated champions of patient centric healthcare in an industry valued slightly higher than tobacco companies get it done when ALL of their predecessors have tried and failed? The carnage is plain to see, but only if you have an event horizon beyond the 24/7/365 current headline news cycle. I don’t know, but maybe the market knows and may even be paying attention to what came before?

For those who want some academic consideration of the broader strategic question, industry history,  if not possible glide-path in the consolidation orgy we are currently witnessing (both provider and health plan/payor/benefits solutions providers) with an exquisite dissection and analysis of the rise, fall and rise again (post Aetna/U.S. Healthcare acquisition), check out: ‘From Managed Care To Consumer Health Insurance: The Fall And Rise Of Aetna‘ by James Robinson, PhD, MPH the Leonard D. Schaeffer Professor of Health Economics and Director, Berkeley Center for Health Technology at my alma mater U.C. Berkeley.

The ACA, ACOs and Health System Reform 5 Years Later

By Gregg A. Masters, MPH

In the relentless sound byte and laughable misrepresentation of facts proffered by ideologues intent upon diluting if not repealing the ACA, one consistent voice of reason and evidence mindfulness is that presented by the cogent and thoughtful reflections on the indicia of ACA implementation courtesy of ‘team Commonwealth Fund’ aka @CommonWealthFnd.aca_5 years out

Published recently in the New England Journal of Medicine by the Commonwealth Fund‘s CEO and former National Coordinator for HealthIT David Blumenthal, MD (@DavidBluementhal) is one to consume, one provision at a time.

The full NEJM article is posted here.

The relevant discussion to readers of this blog specific to ACOs is pasted below:

Accountable Care Organizations

The ACA encourages health care providers to form new organizational arrangements called accountable care organizations (ACOs) that are intended to promote integration and coordination of ambulatory, inpatient, and post–acute care services and to take responsibility for the cost and quality of care for a defined population of Medicare beneficiaries. Under the Medicare Shared Savings Program (MSSP) of the ACA, providers who create such organizations and who also maintain or improve the quality of care can share part of any savings they achieve.
Providers can also elect to become so-called Pioneer ACOs, which not only share savings but also accept substantial risk if expenses for Medicare patients are greater than expected. Recently, CMS announced still other variations on the ACO theme, including arrangements in which ACOs function very much like Medicare Advantage plans.17 Indeed, many observers see ACOs as a bridge from fragmented fee-for-service care to integrated, coordinated delivery systems that resemble the tightly organized Medicare Advantage plans.
The two existing varieties of ACOs have spread with considerable speed. The MSSP has 405 participating ACOs serving 7.2 million Medicare beneficiaries (14% of the Medicare population).18 Quality measures have generally improved for the 33 indicators tracked by MSSP, and patients report better care experiences in some respects than Medicare beneficiaries who are not part of ACOs.19 CMS estimates the savings at approximately $700 million, as compared with control populations not enrolled in MSSP. A total of 32 organizations started in the Pioneer program; 11 transitioned to the MSSP track, and 2 withdrew entirely. The secretary of health and human services reports that the Pioneer program saved $385 million in the first 2 years, as compared with fee-for-service Medicare beneficiaries.20 These cost and quality results are early and modest, and further evaluation is needed before definitive judgments can be made.

A most useful and interesting Appendix re-capping and categorizing the many moving parts of the ACA enabling payment and health system delivery reform is available here.

Big h/t to Blumenthal et al for this fact based and honest reflection of measuring the impact of the ACA five years out.

Three Reasons Your ACO Will Likely Fail

by Gregg A. Masters, MPH

I’ve seen this before, and many times at that, see: 6 Reasons Your ACO Will Fail (A Series), Any One Will Do.

While some continue to debate and attempt to repeal the Affordable Care Act, the underlying market dynamics on which the vision of ‘Accountable Care‘, the triple aim or a sustainable healthcare ecosystem has risen continues to spawn innovation and remains remarkably intact.

Yet ACO’s are the workhorse in the mix of this triple aim enabling ACA magic and will remain so (until and unless the Medicare Advantage special interests prevail in their advocacy of an ‘end-run’ from ACOs direct to ‘MA’s’ aka global risk bearing HMOs).

But back to my premise…

Reason One Your ACO Will Likely Fail

The first impulse is to put ‘form’ (vs. function or culture) at the top of the agenda. I like to call this the ‘O,G & E‘ (organization, governance and equity) card. Just vision a typical process which plays out over and over again. An entity (usually a hospital or hospital system with access to capital) retains ‘advisers’ presumptively qualified to educate and guide local leadership into focused consideration of a ‘journey’ away from if not antagonistic to their core operations and culture.

First up are the lawyers, then accountants and consultants who address the business risk profile, regulatory environment, competitive landscape and outline structural models or options of organizing and participating in this new line of business consistent the mission, objectives and tax status of the ‘host’ enterprise.

Right from the outset the focus becomes the form of the organization and not it’s vision nor underlying or enabling culture per se. While these considerations may be part of the mix, breathing life into this sensitivity and operational awareness is usually seen in the designation of one or more hospital or health system friendly physicians to represent the balance (ergo interests) of the medical staff tribe. We’ve seen this in PHO formation, or the underlying management services organizations (MSOs), JV’s, etc., to support their operations. But make no mistake the ‘deliverable’ is a timeline, top down, check the box type strategy where the meter is running and things need get done whether they’re layered on quicksand or ‘terra firma’ so to speak.

Reason Two Your ACO Will Likely Fail

It’s about the right kind of ‘leadership’. More often than not the DNA guiding these conversations and shortlist of implementation decisions are principally healthcare leadership typically sourced from ‘institutional’ (hospital, health system or more recently IDN circles) vs. physician leaders who ‘see the [arbitrage] light‘, i.e., principally those trained in leadership (whether at the level of MBA’s or a scheduled participation via off-site Estes Park like medical staff/administration co-management team building efforts), have historically participated in managed care v1.0 et sequelae, AND actively value the transformation imperative under consideration.

Add this to the fact that the most appropriate physician leaders in this volume-to-value transformation are primary care physicians, yet the true power brokers in the institutional setting are the cash cow volume based specialties including cardiology, orthopedics, and neurosurgery, and fill in the blank proceduralists. PCPs have for the most part been carved out of inpatient culture and stay relatively focused on the ambulatory or outpatient side of medicine. A trend that began a while ago as the credentialing process assured a growing economic turf war as to who got to do what in the hospital, and was sealed by the industry move to the ‘hospitalist’ as the go-to inpatient specialist.

Reason Three Your ACO Will likely Fail

Rick Scott the former CEO of the disgraced Columbia/HCA hospital system (and now sitting Governor of the State of Florida) who earned that system a record $1.7 billion fine and with whom I routinely and vehemently disagree with, best framed the volume-to-value shift as follows:rick scott quote

While this quote may be another carefully crafted (some may say devious) calculus as Scott continues to oppose the ACA and Medicaid expansion in the ‘Sunshine State’ (see: ‘Gov. Rick Scott officially convenes commission on hospital spending‘ ), it none-the-less accurately reflects why institutional leadership will neither proactively nor aggressively pursue a revenue cannibalization strategy. Disruption as he noted must come from ‘outside’, however in this case outside comes in the form of hospital asset untethered ACOs driven by prudent resource allocation, access and quality in their service area.

Until hospitals become ‘cost centers‘ (as in Kaiser Permanente) vs. the traditional revenue plays they’ve no doubt perfected while hospital based care drives the cost of healthcare UP, this is mostly rhetoric to buy time and sometimes exit packages of oft overcompensated senior executives both in the 501(c)3 sector as well as their more transparent though similarly for-profit oriented health system operators.

So don’t hold your breath until the Kaiser Permanente model becomes the defacto clinical integration and financing standard in the U.S., but do watch what former ONC Director for Health Information Technology evangelist turn healthcare disruptor and entrepreneur at Aledade (a physician led ACO management company (MSO) – see ‘Waiting For ACOcor) Farzad Mostashari MD is up to. That Venrock and Bob Kocher in particular are rallying behind this model says a lot to me.

Bottom Line

Your ACO will fail if it’s of the institutionally led, top down, corporate check the box variety, and not imbued with the full court press commitment (so eloquently espoused by Don Berwick) of the required culture of health values to achieve the triple aim. Your ACO’s DNA must truly be truly disruptive from the bottoms up AND willing to can·ni·bal·ize  traditional hospital cash cow revenue streams.

That’s a lot to ask. Building that bridge in a quarterly earnings per share mindset maybe a bridge too far. Just ask Greg Samitt, see; Eating Glass?’: A DaVita Healthcare Partners Hiccup or Impending Physician Integration ImplosionHe tried to bring that bridge forged at Dean Clinic (scaled movement from production to value) at Healthcare Partners (Da Vita) but for reasons unclear to me was prematurely asked to leave.

For some of my experience on this journey, see ‘Some Context and Perspective on Standing Up The ACO‘.

A Fork in the Road: ACOs vs. Direct Practice?

by Gregg A. Masters, MPH

If you come to a fork in the road, take it.

In the run up to the passage of the Affordable Care Act (select milestones here), the Senate Finance Committee under the leadership of Chairman Max Baucus presided over a comical volume of amendments proffered by his colleagues on the other side of the isle, see: ‘Senate Democrats Lead Historic Passage of the Patient Protection and Affordable Care Act‘.

Senate Finance CommitteeHaving witnessed gavel-to-gavel coverage of this painful historical consideration (some may say exquisite political theater) I soon began to refer to this bunch as the ‘dis-ingenuous five‘ (Hatch, Grassley, Cronyn, et al) as all of their amendments had one thing in common – to dilute if not distract from the intent of the Act or any of its targeted provisions.

Fast forward some 5+ years and the ideological drama of a very complex piece of legislation still engenders varying degrees confusion, implementation complexity, litigiousness and its share of opposition often nested inside simplistic and dumber by the dozens sound-byte alternatives, witness this recent exchange between former Senator and Governor Judd Gregg and the journalist Chris Hayes.

Yet, forged from private market competitive ‘lessons learned’ experience, supported by tomes of sound bi-partisan health policy reasoning and enabling regulatory consideration two seemingly opposing remedies co-exist with relative degrees of market uptake success: ACOs and ‘DPCs‘ (direct practice‘) including it’s retainer and membership model medicine derivatives.

Some say direct primary care (DPC), still a trickle in terms of share of medical practice participation, is the way to ‘give the finger’ to the prevailing mangled care amended bill and chase model of American medicine (and by proxy the ACA) and exit the system in favor of a more simplified and patient centric model. Yet there is more to this story as few get the provisions in the ACA enabling the inclusion of DPC’s as potentially ‘qualified health plans‘ and thus eligible for listing on State or Federally Facilitated Health Insurance Exchanges, see: ‘DPC and Insurance, HDHP, HSAs‘; not to mention there are a range including ‘hybrid’ DPC models (from Qliance to OneMedical and many in between) that stay tethered to a claims filing and collections model of operations.ACO's: what's next if we fail? Jay Crosson, MD | 3rd National ACO Congress

ACOs are a statutory construction of the ACA via introduction of Section 3022: The Medicare Shared Savings Program and center core to the impact and efficacy of the law’s intent. To many this rules ACOs out as de-facto agents of change driving transformation of an excessively complex, silo-ed and provider centric healthcare financing and delivery system quagmire.

Another Way To Look At It

So for those willing to dive a little deeper into the chassis of both business models and services line extensions there may be more similarity between these two seemingly oppositional vehicles.

Both are variably tethered to the ACA and thus part of the implementation vision of the President and his then allies in the Congress. At its core the DPC model is a return to HMO roots of ‘pre-paid’ comprehensive primary care services though the DPC model is not in the business of health insurance while HMOs clearly are. While DPCs typically only include the range of primary care services they control, and exclude specialist referrals, lab and imaging services and hospital inpatient or outpatient services, they do leverage principles of ‘re-insurance’ via optional wrap around high deductible or catastrophic plans.

ACOs in the Medicare Shared Savings Program (MSSP) are seen by many especially those risk savvy medical group or integrated delivery system operators of Medicare Advantage health plans (aka ‘HMOs’) as too little too late (or ‘HMO-lite’) versions of the real deal and unlikely to steward the meaningful transformation from a volume-to-value based healthcare economy.Standing Up the ACO

Yet, the truth is they’re both part of the broad brush of initiatives included under the tenets and principles that gave birth to the ACA, see: ‘Obama-care 101: The president’s 8 principles‘.

Clearly this transformation of 1/5 of the U.S.economy will take time and there are many moving parts. The question is do we have enough time for pluralistic remedies to take hold before the ‘system’ collapses on itself? The nightmare scenario being non-risk bearing ACOs can’t deliver the shift to value and DPC led ‘exits’ create a perfect storm of declining supply at the precise time of peak demand for primary care services.

So one more time as I often say here: ‘…we shall see?’