The ACO Conundrum

In a recent New York Times article,” Consumer Risk Feared as Health Law Spurs Merger” http://www.nytimes.com/2010/11/21/health/policy/21health.html?_r=1&pagewanted=print the author points out that consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses. Regulatory agencies face a delicate task: balancing the potential benefits of clinical cooperation with the need to enforce fraud, abuse and antitrust laws. Congress’s purpose was to foster cooperation in a health care system that is notoriously fragmented. The hope was that the new law would push doctors, hospitals and other health care providers to come together and jointly take responsibility for the cost and quality of care of patients, especially Medicare beneficiaries.



“ ..eight months into the new law there is a growing frenzy of mergers involving hospitals, clinics and doctor groups eager to share costs and savings, and cash in on the incentives. They, in turn, have deployed a small army of lawyers and lobbyists trying to persuade the Obama administration to relax or waive a body of older laws intended to thwart health care monopolies, and to protect against shoddy care and fraudulent billing of patients or Medicare. “



Furthermore, newly formed Accountable Care Organization (ACOs) could be tempted to hold down costs, and maximize profits, by cherry-picking healthier patients and denying care when it’s needed. Under the law, Medicare can penalize organizations that avoid high-risk, high-cost patients but enforcement mechanism are not sufficient to monitor those violations.

In addition Elizabeth B. Gilbertson, chief strategist of a union health plan for hotel and restaurant employees, also worries that the consolidation of health care providers could lead to higher prices.

“In some markets,” Ms. Gilbertson said, “the dominant hospital is like the sun at the center of the solar system. It owns physician groups, surgery centers, labs and pharmacies. Accountable care organizations bring more planets into the system and strengthen the bonds between them, making the whole entity more powerful, with a commensurate ability to raise prices.”

In conclusion Dr. Donald M. Berwick, the administrator of the Centers for Medicare and Medicaid Services, hails the benefits of “integrated care.” But, Dr. Berwick said, “we need to assure both patients and society at large that destructive, exploitative and costly forms of collusion and monopolistic behaviors do not emerge and thrive, disguised as cooperation.”

As physicians we should take the initiative and form collaborative practice organizations and work together to form ACOs that truly serve the public health and not only serve to line the deep pockets of entrenched interests.

The opportunity to act is now!

Bernd