“I think right now most policymakers are not sure if the upside is better than the downside,” he adds. “I think the answer, personally, is not to try to break up providers and do a lot of anti-trust activity. We need to understand whether, and how much, integrated groups are able to use market power to charge higher prices. And, if they do, there may be other ways to combat that problem while keeping the groups intact.”
Dr. Greeno says growing pains are inevitable along the way, particularly because the move to the ACO payment model is a seismic shift for a healthcare industry that has traditionally been based on a fee-for-service model.
“How we pay for healthcare in this country is going to be completely flipped on its head,” he says. “Part of the goal, of course, is better outcomes for patients. But it’s also cost efficiency. In the meantime, the entire system for 100 years has been paying for production.”
Dr. Greeno compares it to the shift that was the managed-care movement. Moving forward, the shift will create winners and losers and most likely will result in massive consolidation of healthcare organizations—from nearly 700 today to what Dr. Greeno believes may be 50 to 70 mega-providers.
“It’s basically what happened when HMOs started paying capitated payments to physician groups,” he says. “The groups then had X amount of dollars to care for their patient population, and if they couldn’t make that work, they went out of business or were acquired by more successful groups. If they could make it work, then they survived. It’s the exact same thing. It’s not quite as dramatic, as it is not going to happen overnight, but that’s where it’s heading.
“And instead of occurring in pockets around the country like in Southern California and Minneapolis, it’s going to be nationwide, and the world’s largest insurance company, which is Medicare, is driving it.”
Dr. Auerbach notes that while the disruption already has caused some groups to drop out of the ACO programs, he does not see that as a precursor to more organizations turning away from the program, particularly as it is among the key planks of the general healthcare reform movement.
“It is part of a larger wave that really is changing the way we do healthcare,” he says. “I think that as [ACOs] grow…people are going to say that this is becoming something like the dominant form of delivering healthcare.”
Richard Quinn is a freelance writer in New Jersey.