ACO’s: It Ain’t Just About ‘Health IT’

By Gregg A. Masters, MPH

We’ve been somewhat on an unexpected hiatus since HiMSS 2012 in Las Vegas, but are now back with intent to assimilate and interpret the subtext or tea leaves driving the transformation towards accountable care. I will leave that update to another blog post, but for now, a quick comment on two newsworthy items reported last week.

First is the demand for arbitration filed by Blue Shield of California against Monarch Healthcare, among other ‘breaches’ claims a violation of the assignment provision in their contract by agreeing to be acquired by the United Health Group subsidiary OptumHealth.

Second as correctly identified by Barbara Duck aka @MedicalQuack on the potential pandora’s box these ‘acquisitions’ may stimulate via as series of non arms length wholly owned subsidiary transactions, click here.

But first, a perspective to the well intended but occasionally over-simplified (from a business model & market dynamics point of view) EHR and health IT evangelical flank: better know your [provider] market!

Things may not be as they seem!

Absent full economic integration, the provider marketplace is a ‘hodgepodge’ of less than transparent business relationships, often with poorly aligned if not outright conflicting reimbursement rules, driven by variable state and federal laws including local market practices. For example, some states operate under a ‘corporate practice of medicine’ doctrine, while others do not. Such state law directly impacts the type of permissible entities that can pass as ‘physician driven’ in one ‘market’ vs. another (contrast California to Florida). It influences how physicians can be hired, the terms under which contracts are entered into and the means by which professional services can be legally provided.

Yet, take into consideration the following:

  • most physicians remain in solo to small group practice
  • few operate with fully functional EHR’s to date
  • while the FTC and DOJ are enabling clinical integration absent legal integration as a permissible form to pool physicians together into ‘virtual’ potentially accountable units absent anti-trust risk

In the aggregate above, it can be quite reasonably concluded by some that all that’s needed to enable accountable care is merely stitching via ‘IT infrastructure’ these discrete physicians or small group practices together under an umbrella digital spine, and voila, we have accountable care.

Not so fast, unfortunately this assumption grossly distorts the underlying DNA or nature of the provider marketplace in 80+% of US communities. Get to know the often opaque ‘underbelly’ of your provider community. Managed care introduced quite a bit more than just discounted medicine!


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