Remember when accountable care organizations, or ACOs, were healthcare’s savior? Beginning five years ago, ACOs were heralded as a vehicle to improve safety and quality, while also reducing healthcare costs. Fast forward to today, and a majority of all ACOs continue to lose money hand over fist. This July 7, 2015, Wall Street Journal article is one of many articles declaring significant financial losses for ACOs. The article is noteworthy because it was co-authored by one of the foremost proponents of ACOs, Ezekiel Emanuel. So what happened? I would propose a power struggle ensued.
Here’s a detailed look at the financial performance for nearly 400 ACO participating organizations, in a winners and losers summary that is complete with how much they won or lost. Many ACOs have improved quality, but incurred higher costs. While other ACOs lost money and the quality of care was reduced. Participation in either the Pioneers or Medicare Shared Savings Program does not guarantee savings or quality. The power struggle between hospitals, physicians and payers continues and here’s how physicians can retain the upper hand.
I recently read an informative article by Dave Chase about poor hospital CEO behavior and the devastating effects on the middle class. Mr. Chase has an impressive Linked In profile, is truly dedicated to healthcare system improvements and has been named one of the most influential people in Digital Health. I wish to highlight some excellent data from the post, and more importantly, tell physicians you can still have it all. However, to get it, we need to be smarter, which requires capital investment to maintain independence and grow funds.
Know the rules are stacked against you
The challenges to physicians are everywhere and come in many forms. Sometimes it is hospitals, other times, strict regulatory requirements and still other times, it is the high deductible health plans. They do not want a level playing field, which is evidenced in these quotes from Mr. Chase’s piece:
From a startup health plan with its own clinics: “We regularly have to respond to state regulators, as they are obligated to respond to complaints filed by the hospital that is politically connected at the statehouse (translation: campaign donors). The regulators are good people who know what’s going on. Unfortunately, they are obligated to respond to the complaint and investigate. We are one of the low-price offerings in the public exchanges with superior services and convenience–something the state should love. Yet, we get bogged down with frivolous complaints meant to bog us down.”
From a next generation primary care leader: “Most health systems that are purchasing or employing primary care physician practices are locking them down to geographic non-competes that last for two years. That prevents true competition for talent. In California, companies are not allowed to have strong employee non-competes. That allows employees in Silicon Valley to flow to wherever the talent proposition is strongest. This legal environment has supported the creation of a highly competitive environment for talent as a result. If innovative new companies had a great physician value proposition, the reduction of this barrier would allow for talent to readily flow to the innovators. The legal authority for these non-competes are at the state level. The states could make an argument that they have invested public resources in the physician level training and as a public good should not be restricted from seeking a job anywhere.”
There are quite a few more anecdotal items, however, I found the two above to be particularly telling. These ideas are something I encounter with frequency as we assist practices in maintaining their independence. Forces at every turn are attempting to thwart physician independence and undercut competition, which all leads to fewer outlets for care and higher prices. This is a zero sum game with many physicians believing their only option is to join a hospital. In many areas around the country, this makes the most sense. For many physicians with whom I speak, independence is still their goal. The good news is, to maintain independence and thrive, all you need are a data quality plan and capital, which it may surprise you to learn, are already within your grasp.
The noise surrounding healthcare’s transition from fee-for-service to value-based is everywhere. There are countless webinars, white papers, survival guides and even CMS’s own roadmap to understanding it.
First, physicians are measured on the quality of care delivered. This measurement is derived from your practice reported data. Everything is based on the accuracy of your practice’s data, which is why some sort of quality or data integrity initiative in your practice is paramount. It bears mentioning, a dashboard merely displaying data without the requisite understanding of a) what the data means, b) the skill set to make workflow changes for data improvement, and c) the ability to drill down into the data will be the downfall of many practices. Having a partner assist with creation of the quality program assures your safe passage into value based medicine.
Second is the need for capital to fund practice growth. It has been my experience that tremendous access to capital already exists within current practice operations through the refinement of the credentialing processes, payer contract negotiations, revenue and AR management, physician recruitment and overall practice marketing. It would astonish many practice owners and CEOs to learn about the riches that are available to them as a result of services they already provided. These monies can be used to grow funds, maintain independence, hire staff or build a secure retirement. In less than 30 days, we are able to identify just how much is there.
PRO TIP: Because Intermedix is in the business of helping physicians remain independent, we invite you to save the $7k-$10k investment in a consulting firm and get a complimentary forensic financial analysis of your practice. Consider this a fiscal report card of your practice’s financial health. Who knows, it just may be worthy of the refrigerator!