Are Institutionally Led ACOs ‘DOA’? I Say Heck Yah!

By Gregg A. Masters, MPH

At the end of the [business model and strategic positioning] day, it’s all about the intangible but mission critical ‘C’ word, i.e., culture, and whether two traditionally oppositional styles (physician v. hospital) can mash-up and ‘meaningfully integrate’ (clinically, legally & workflow wise) where previous attempts during the 80s and 90s failed.

Truth be told, fast forward a couple of decades and that cultural divide has yet to be reconciled a least on average. Granted there are some exceptions (most notably progressive integrated delivery systems who’ve aligned financial incentives but more importantly ‘vision’), and many of the oppositional dinosaurs (physician ‘free agency’ and solo practice are on an accelerated decline) are retiring or otherwise stepping aside. Yet even with the emerging digital natives sporting MD degrees, the cultural divide between clinicians and administrative types (or latter day suits of all stripes), remains a geopolitical land grab just beyond the reach of the individual ‘P’, “H’ and thus ‘O’. Yet, all healthcare is local right, so clearly there are differences based on locality and market considerations.

What’s different today?

Most will say that the difference between PHO 1.0 (for the casual reader or those with a professional event horizon shorter than a decade plus, PHO = a physician/hospital/organization), and the ACO movement spawned by the Affordable Care Act and most visibly iterated as PHO 2.0 roll-ups (since many of the more visible and publically tagged ACO efforts include an ‘H’) nets out to an accessible if not the ‘new and improved’ ubiquitous technology edge, coupled with smarter ‘productivity’ systems to hold docs accountable post acquisition (risk transfer) of practice assets or hiring.

Back when the internet was just getting going circa the 1990s and Jim Clark was pushing the Healtheon vision – an ambitious agenda to virtualize if not harmonize the complex healthcare ecosystem, we did not have the ubiquitous connectivity and prevalence of user friendly devices including mobile and tablets or the enabling bandwidth let alone national coverage.

Reading the ‘tea Leaves’

Yet even in the face of ‘smarter people’, ‘better systems’ and increasingly accessible, ‘robust cloud based services infrastructure’ (IT and otherwise) with attractive price points, is the people challenge any different today? At least two data-points suggest otherwise evidencing the underlying ‘dis-ease’ associated with the implementation complexity of a ‘soft sell’ re-engineering of American healthcare via the aggregate market uptake of ARRA, HITECH and key ACA (ACO) provisions.

According to a Athena Health’s 2012 ‘Physician Sentiment Index‘:

• 69% believe EHRs can improve patient care, down from 75% the year before.
• 75% believe achieving Meaningful Use is a burden.
• 53% believe the Affordable Care Act will be detrimental to patient care, up from 50% the year before.
• 58% believe most or all of the Affordable Care Act should be repealed, and 26% believe that some elements should be repealed. Only 16% said to keep it as is.
• 63% believe the shift to Accountable Care Organizations (ACO) will have a negative impact on profitability, up from 48% last year.
• 54% believe the quality of care will decrease over the next five years.

Add to the mix the following headline: ‘Physician Turnover Hits New High as Demand for Primary Care Increases’, which reveals:

physician turnover reaches the highest rate since the first year data was collected in 2005, and exceeds pre-recession levels. Medical groups reported an average turnover rate of 6.8 percent in 2012, according to the 8^th annual Physician Retention Survey from Cejka Search and the American Medical Group Association (AMGA).

The survey also reported turnover of 11.5 percent among advanced practice clinicians (APCs), which includes physician assistants and nurse practitioners.

Also noteworthy is from the report’s ‘Other Key Findings’:

‘Culture is the Top Controllable Turnover Factor: Lack of cultural fit was the third most common reason given for voluntary departures, and the most common factor within the control of a medical practice.’

‘Demand for Care Teams Intensifies: More than three-quarters (76%) of respondents plan to hire more primary care physicians in the next 12 months, 67 percent plan to hire more nurse practitioners and 61 percent plan to hire more physician assistants. Strong teamwork skills will be vital to successful coordinated care.’

Bottom Line

So that ‘primary care sucking sound’ (remember Ross Perot’s NAFTA warning?) mostly to build out and staff ACOs, medical homes and their derivative ‘high value’ networks, are creating an environment where the natives are clearly restless, while the disconnect between industry rhetoric and the on the ground reality of the transformational imperative has never been more acute, nor the stakes so high.

ACOs were purposefully visioned as physician led enterprises, yet as is often the case in healthcare innovation amidst a change resistent ‘just say no’ culture the capital partner steps in to steward if not direct the initiative’s vision of organization, governance and equity (fairness if not capital) issues. Moreover, hospitals (or their parent systems) are the likely source of ‘capital’ – financial, managerial and infrastructure, ergo they step into the void of physician leadership to move the needle albeit in their narrow view of self interest.

Most institutionally led ACOs therefore are dead on arrival unless there are compensating factors which infuse [group practice] physician culture at the center of the enterprise in pursuit of the triple aim, or hedges where hospital executives clearly see their role as transitional enablers and not drivers of a physician seeded transformational process amidst a sea of conflicting incentives, values and workflows.