ACOs ‘In the News’

Gregg A. Masters, MPH

heritage masthead

As the drip, drip, drip of the reported collateral fallout – both perceived and actual – of the stalemated resolution of the Federal shutdown makes it way into the American psyche we’re also seeing reports from the front on the success, indifference or failure of the ‘ACO vision’ to successfully pivot the healthcare borg from a fee-for-services (volume) to a fee-for-value paradigm.

Today’s news reports on two entities with which I am somewhat familiar – Texas Health Resources (THR) and Heritage Medical Systems (Heritage Provider Network) both parents respectively of first generation CMMI Pioneer plays. I served as the Vice President for Managed Care and Network Development at THR’s branded affiliate ‘Wellspan Health Network” (including System Health Providers (SHP) and consulting roles to Genesis Physicians Group) pre and post merger of Presbyterian Healthcare Resources and Harris Methodist Health System into THR, while at Heritage Southwest Medical Group, I championed provider network development and management including capitating specialty services for a global risk contracts.

Sourced from: ‘Digging Deeper: Lessons from an ACO Success Story.‘ Texas Health Resources

Perhaps framing the irony surrounding the confused narrative associated with the signature accomplishment of this President against a history of persistent previous legislative failure, the author notes:

We all know that the word “Obamacare” elicits immediate emotion from a good chunk of the American public. Thanks to late night TV host Jimmy Kimmel, and a media poll or two, we know that the words Affordable Care Act (ACA) do not elicit the same kind of emotion.

This only makes sense if you can buy with a straight face the sensibilities of the Tea Party cheerleading line of ‘keep your stinkin’ Government hands off my Medicare’ rant.

Meanwhile, the decisions of these two entities shed light on the underlying motivations likely to be driving in one case the decision to ‘step down’ in the risk ladder (THR) while in the second expressing a warp speed determination to proactively manage the risk exposure and deliver on the triple aim.

The author cites THR’s CIO Ed Marx aka @marxists on twitter as follows:

[THR] ….wanted to avoid paying a penalty, but was still focusing on ACO efforts. 

Whereas, Jonathan Gluck senior executive and counsel at the Heritage Provider Network notes, we’re:

…all in on the program.

This differential approach to risk is illustrative. Both entities at least in the Texas market have erratic performance. Heritage Southwest Medical Group ultimately declared bankruptcy during the global risk days in the late 90s, while THR returned to it’s hospital roots when the succession leadership vetting was over and the insurance culture of the then CEO of Harris Methodist Health System demurred to the predominant hospital culture of the Presbyterian leadership (aka the Smith v Hawthorne succession dance) by selling the Harris Methodist Health Plan to PacifiCare Health Systems.

It should come as no surprise that a physician organization untethered in any material ‘bricks and sticks’ sense to hospital infrastructure other than a drawer full of partial (at best) risk contracts should embrace the Pioneer model; whereas a hospital system even in partnership with a risk savvy physician organization the likes of ‘NTSP’ aka North Texas Specialty Physicians (_NTSP_), the JV partner in the Pioneer ACO) would step down and recalibrate their pathway options into this value shift.

The jury is out whether institutionally led health systems can re-engineer their culture let alone their asset portfolio to meet the vision quest of the triple aim via ACO intermediaries. If I were a betting man, my money would be on Dick Merkin and Mark Wagar, et al to tame the unrestrained appetite of the often maldistributed, excess capacity and misaligned production based assets.


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