Accountable Care Organizations – The Weavers

The Emperor’s New Clothes – The Weavers


Imagine the weavers staring at the naked, royal abdomen of the emperor. They knew full well the absurdity of the situation, but once the path of deception was taken, the weavers could only compliment their leader’s fine taste in clothing.

Last week I wrote about the clothing. Now, let’s take a closer look at the weavers.

An Accountable Care Organization, as a model of healthcare delivery, embraces the core values of primary care. The stated goals of measuring performance, improving efficiency, and coordinating care are undeniably worthwhile.

Rewarding primary care physicians to reduce the cost of healthcare

remains the right idea.

The ACO has the potential to do so much good. But the weavers got involved.

Hospitals, Insurance Companies, and Healthcare Entrepreneurs could see that the reimbursement system was changing. Billions and billions of dollars would be shifting from their control. 

Time to start weaving.

If primary care physicians were to be able to control costs, then the weavers knew that they needed to be able to control primary care physicians. 

The initial model of the ACO, proposed by the Medicare Shared Savings program in January 2012, empowered primary care to form networks with other providers to organize and coordinate delivery. That was the simple beauty of the ACO. Motivate PCPs. PCPs could use data to steer patients to more cost effective resources. By saving money, the PCPs could receive greater pay themselves. That would be a win for all.

Save primary care by helping primary care save money.

The problem for the weavers was simple. If PCPs saved money by keeping patients out of hospitals, referring to less expensive consultants, or using cost effective treatments… the money that they saved might be the weaver’s money.

That would never do. After all, weavers need lots of money… you know, to weave.

ACOs threatened to change the revenue of some very powerful and influential weavers. 

Those silly PCPs, they can’t save money on their own. The weavers must help these simple PCPs. Healthcare can only be delivered by complex, multi-layered vertically integrated networks. And these networks are very expensive because… well, they are expensive.

So messages were quickly spread:

Join an ACO or perish.

Don’t miss out. Never mind the details. Pay no attention to the beta testing. You need this. You want this. You got to be in this. We’ll worry about what an ACO is later. Sign up. Structure? Distributions?Ownership? This is the latest, greatest, new thing.

And just as with the Emperor’s new clothes, “only the ignorant” can’t see the beauty.

Physician’s anxiety to join an ACO was reinforced by….you guessed it…the very companies forming the ACO.  Hospitals, Insurance Companies, Specialists Organizations, and Entrepreneurs. Vertically integrated companies that much protect their market share, increase utilization, and support massive infrastructure. The very companies that contributed to our nation’s healthcare economic crisis. They don’t want to be part of the problem, they want to help….they just need lots of money to do it. 

And who are their key targets?  PCPs.

Remember that the only medical specialty required to form an ACO is primary care. So naturally all ACOs claim to be “primary care driven”. But ask who controls the revenue, who determines the overhead, and who steers the direction of utilization? Weavers are quick to point out the beauty of the clothing. But if you can’t see it, you must be ignorant.

In order to be recognized by the Department of Health and Human Services as an ACO the network must include sufficient numbers of PCPs to provide care for a minimum of 5000 patients. All of the other members of the ACO are infrastructure, overhead, and weavers.

So, if PCPs are the core component of an ACO, why don’t PCPs form their own ACO?

I’m so glad that you asked. I’ve written enough about the weavers.

Because, after all, only the Emperor himself could stop this charade.

Next week we’ll talk about the Emperor…  and oh, by the way…  you are the Emperor.

Guy L Culpepper, MD

Accountable Care Organizations – The Emperor’s New Clothes

The Emperor’s New Clothes

In 1837, Hans Christian Andersen published a tale about weavers promising the emperor a new set of clothes. These expensive robes would be invisible to anyone who was unfit for their position. If a person was ignorant or incompetent, they simply couldn’t see the new and majestic garments.
The emperor, of course, could see the clothes clearly.
Very few models of healthcare delivery have been as misinterpreted and manipulated
as the Accountable Care Organization, the ACO.
How an ACO appears is in the eye of the beholder.
My goal in writing this column is to look a little closer.
The term ACO was first used in 2006 as a possible Medicare payment structure.
It became a part of our healthcare jargon in 2009, when the recycled idea was included
in the Affordable Care Act.
The proposal that healthcare providers 
should be held accountable 
seemed to touch a national nerve. 
I mean, who could possibly disagree with the idea that healthcare should be accountable? Of course, as physicians, we knew that we were already accountable. We have been accountable for our actions since day one of medical school. Some would argue even sooner, considering the test scores required to get into medical school.
We are accountable to the State Board of Medical Examiners, DEA, Certification Boards, Credentialing Panels, Therapeutic Committees, countless rules and regulations like HIPAA.
We answer to every patient, their families, and their attorneys.
Oh, and one other thing…
we are accountable to the highest code of ethics of any profession in the world.
But an ACO is not that kind of accountability. This is financial.
The ACO model seeks to place financial accountability on healthcare providers in hopes of improving care management and lowering healthcare costs.
A noble and worthy pursuit, whose goal is shared by primary care physicians.
No one provides more cost effective care than PCPs.
This is why PCPs are critical, well… actually required, for the ACO model.
In fact, an ACO is like a three legged stool:
Primary Care
Payment Linked to Improvement
Performance Measurement

These three core principles are the foundation of the ACO model. But then the weavers got involved.

So let’s see where it’s gone since proposed. Here’s some background… fabric, if you will.

The Department of Health and Human Services (who is “accountable” for 25% of every dollar spent by our federal government… you may know them as those guys in charge of Medicare and Medicaid… but they are involved in so much more) proposed the initial guidelines for the establishment of ACOs under the Medicare Shared Savings Program in March, 2011.
ACO guidelines call for improved management and reduced expenses, that is care coordination.
The success of an ACO is based upon its ability to “incentivize” hospitals, physicians, and other providers. 

Pay attention now… this part is very important.
Incentivize” is business jargon for money. 
Kind of like when Medicare “incentivized” private insurers to get involved in Medicare by paying the insurance company massive amounts higher than Medicare rates.
In other words, ACOs could get lots of incentive money. That’s what the government does when it doesn’t know how to fix something… add infrastructure, regulations, and then incentivize.
Here it comes…
An ACO must have PCPs to get the money. Lots of PCPs means lots more money.
Now you understand why every hospital, insurance company, and healthcare entrepreneur wants to sign you up for their ACO.
But don’t worry, the ACO will be invisible.
Next week we’ll talk about those weavers.
Guy L Culpepper, MD

Welcome to the Jefferson Physician Group Blog

Dear JPG members… It’s been a long time coming.

Here we are – live on the web… and blogging.

During our 18 year history, the Jefferson Physician Group has used just about every form of communication to reach our members.

Some have been better than others.

“Did you get my letter…”      “I left you a voice mail…”
“It’s called a fax… yes, so don’t answer the phone…”
“I’m calling from my car… that’s right… a car phone!”
“I think we got a bad connection…”
“Do you have an email address…”

So many messages, so many dropped calls.

The challenge of communicating with primary care physicians is their schedule. No one checks messages quite the same way and never at the same time. Stacks of mail form on our desks like mushrooms, sprouting overnight on a field of information. A very big field.

Welcome to the blog. Information anywhere, anytime.

Log in late at night or early in the morning… you know, doctor time.

And even cooler… you can respond. Expand, agree, or disagree. Immediately. We will discuss, banter, and share. I know you have opinions. Express them.

A living document.
Collectively we can make more informed decisions for navigating through this sea of change. As always, we are better together.

You are part of a team. The Jefferson Physician Group.

This is your group. Stay involved.
Just like the video below.
Independence by Working Together. 

Welcome to the Jefferson Physician Group BLOG

Check back often for updates, news, topics of interest and forums for communication.

It’s an exciting time to be a primary care physician and to be a part of the Jefferson Physician Group… We’re glad you’re with us.

Guy L Culpepper, MD