Follow The Money?

By Jeffrey L. Cohen

Conversation regarding ACOs and even healthcare reform itself is misplaced. The well established facts are (1) more people will receive health care, and (2) the cost of healthcare will come down. It does not matter whether the stimulus is a new law or just marketplace reaction. The fact is that a healthcare system whose players are incentivized to do more with more expensive stuff is not economically sustainable or socially tolerable.

Take a look at our evolving marketplace. What’s the single most distinctive feature in healthcare, aside from inactivity? Integration. Larger hospital systems and larger medical practices, typically single specialty. Good adaptation? Maybe. It is in the short run. Single specialty aggregation is purely defensive though. It allows groups to maintain market share and to resist price compression better. But how will that allow providers to do more with less? How will that stimulate more outcome based, financial risk based care? It doesn’t. It is well established that cost and quality management demands broad spectrum system awareness….ummmm primary care physicians. The adaptation of single specialty group integration is short term. How short? Who knows? But it is clearly not as sustainable as one whose preparation for change includes primary care capabilities.

And how do hospital-based physician alliances help physicians survive and thrive? They don’t unless they have a strong primary care base, and even then it is very questionable whether hospitals will be able to utilize their PCPs and specialists in a way that rewards outcomes based, financially smart behavior. Hospitals have always been sink holes in the landscape of healthcare costs, so why jump in? Physicians need to make sure that their affiliated hospital systems have clear plans and abilities (e.g. management and good physician billing and collection experience) to deliver outcomes at the right price. Studies, however, that indicate over sixty percent of Florida hospital admissions are unnecessary are consoling in a fee for service environment, but devastating in a capitated (or other risk based) one. Physicians have to make sure the ship they book passage on can sail a long way.

And they have to make sure they are part of the right team. What expertise is there in things like IT, financial management, clinical outcomes management, and risk based contracting? You’re gonna need that!

If one believes that healthcare costs are unsustainable (this guy does) and that our entire payment system is driving that result, then the need for new payment systems is clear. And the challenge, just in terms of thinking about healthcare differently, is enormous! How do you go to work and not think “I gotta do a lot, test a lot, do lots of procedures.” How do you begin to shift? Do you shift?

The compelling answer is “YES.” Why not act now, before any law (even one dumber than the one that passed a year ago) gets passed, before our society calls the issue a failure and politicians and our neighbors demand a single payer-type system? Isn’t there a huge opportunity RIGHT NOW? You betcha.

So where is it? It’s in management. The money is in the management. The data collectors, crunchers and implementers are the new gods in healthcare. Anyone who can collect data, show what makes clinical and financial sense and then implement it will be more sought after than conflict diamonds. Show one hospital how to live in that new system, where there are more patients, but less money available, and you retire rich. Show physicians and other healthcare business people the same thing and lead change. And since physicians are busy being physicians, except for a handful of physician entrepreneurs, they’re best bet is gonna be to find good partners in “business” who embrace change and see opportunity.

With over 20 years of healthcare law experience, Mr. Cohen is board certified by The Florida Bar as a specialist in healthcare law. With a strong background and expertise in healthcare law corporate matters, particularly as they relate to physicians, surgery centers and imaging centers. Mr. Cohen’s practice immerses him in regulatory, contract, corporate and compliance. As Founder of The Florida Healthcare Law Firm, he has distinguished himself and his firm for providing exceptional legal services with the right pricing, responsiveness and ethics. He can be reached at (888) 455-7702.


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  1. Follow the Money? Well stated. Being in the midst of advancing the features of the oncology patient-centered medical home model (OPCMH) with its significant cancer care cost reduction features, I am routinely reminded of the complex nature of our healthcare system and the daungting task of implementing payment change to match performance and re-orient to cost accountability. As payment/reimbursement methodologies are now structured (more volume = more money, so keep the volumes up, stupid) there is simply little incentive or interest to change the status quo. Hard to get much attention at the ground level. But suggest we all keep trying.

  2. Counselor Jeff, again your wit and insights hammer home some very astute observations.

    Yet, one I continue to quibble with you over and over again is the characterization of ‘the Act’ as a stupid one, both of it’s own nature as well as the recent extensions into the ‘devil in the details’ implementation rules regarding ACOs or accountable care enterprises.

    While there is plenty of administrative detail, and mission dilution (I strongly supported a ‘public option’, or “Medicare-‘e’ iteration) reflected in the all documents published to date, heck this is America, right? Have you ever watched the legislative process (grin!) unfold?

    So I might point out that the opportunities to innovate along the lines that you warn against and criticize, might just stimulate and enable the creativity that can tame the healthcare borg’.

    Thanks for the excellent post!

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