‘Fear and Trembling’ at AHIP?

The impending rise of Accountable Care Organizations (ACOs) as market participants, and their apparent autonomy from an ‘institutional partner’ perspective, whether of the clinical or licensing (i.e., payor) variety, is no doubt raising concerns in certain sectors.

Clearly the guidance to date, which enables ACO anointing absent a hospital partner is causing some hospital CEOs, and/or their parent systems, to lose some sleep. However, lets not forget about the health plan or payor community particularly from the point of view of their trade group voice.

Last month AHIP (America’s Health Insurance Plans), released ‘Accountable Care Organizations and Market Power Issues.’

Chief among AHIP’s concerns is the anti-trust downside of unbridled market power leading to concentrated (monopolistic) market influence in the hands of too few (and perhaps ‘untethered’) players:

ACOs have the potential to improve quality and reduce costs for consumers and payers alike, by providing more patient-centered, coordinated, collaborative care. The ACA provides only the broad outlines of the ACO program, and without proper design, provider aggregation could result in market power, undermining the program’s goals of lower costs and higher quality. To avoid bad marketplace outcomes, the ACO rulemaking should structure the program to minimize antitrust concerns.

Might this be a case of the pot calling the kettle black?


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  1. The pot calling the kettle black, indeed. My first response (as a physician) to AHIP taking issue with the potential for monopolistic outcomes with ACOs was along the lines of “Cry me a river, insurance companies!”

    More thoughtful consideration has allowed me to respond without resorting to school-yard ad hominem.

    I will review their document and consider their concerns regarding Market Power Issues. However, am I entirely off base in suggesting that market power issues cannot be considered without looking at what each organization sets as it’s primary objective. While a superficial analysis would seem to indicate that payors and physicians are both out to (primarily) provide patient care and *then* sustain market position as a secondary consideration; the direction and intention of these two objectives appear to be quite different for each of the aforementioned groups.

    Hence the position we find ourselves in today.

    1. Off base? Not in my view! Market consolidation by dominant health plans, and/or their carrier parents (heck, other than the small group and individual markets, are their even ‘insurance companies’ anymore?), doesn’t seem to cause ‘executive heartburn’ over those many markets where one or two players already dominate. When you couple that with the fact that they seem to have perfected the art of fee-based ‘administrative services only’ accounts vs. proactive management of risk, what are they managing other than cash-flow?

      Clearly market objectives, and mission matter. Yet, the most well intended C-suite executives nothwithstanding, the mission remains creating value for shareholders, and any publically traded company must always concern themselves with quarterly conference calls with analysts and investors in mind. These are not charitable entities. Yet, is profit inconsistent with a public health, wellness, and prevention mission? Perhaps not, but keeping that mission focused in a too often complex, and occasionally unwieldy family of companies may be too much to ask.

      I think the ‘public utility’ model in operation in Switzerland holds promise for US consideration.

      Thank you so much for your comment!

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