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Are ACOs Solution or Piece of Healthcare Fad Diet?

healthcareBy RON HOWRIGON

It’s no secret that the healthcare system in this country needs to go on a diet when it comes to costs. Currently, healthcare consumes almost 20% of the U.S. economy.  In 1960, back when our healthcare system was more “fit and trim,” it only accounted for 5% of the U.S. economy.  If this trend continues, healthcare will make up 100% of the U.S. economy by the time my children would qualify for Medicare.  Needless to say, it’s time to go on a diet!

There has been a great deal of talk lately about Accountable Care Organizations (ACOs) and how they will be the answer to our healthcare cost problems. Now don’t get me wrong, there are some very good ideas and concepts involved with ACOs, but just like fad diets, they are not the easy solution to a very difficult problem. How many times have you seen a friend or loved one who is certain that they will be able to lose weight and keep it off if they just give up all carbs or just eat popcorn or just follow the all liquid diet or any of other long list of fad diets?  How many of those people saw early encouraging results only to gain back all of that weight when the returned to their old eating and lifestyle patterns?  The problem is that losing weight – just like reducing healthcare costs – is hard and requires fundamental, ongoing change.  There is no magic bullet and there’s no easy way around it.

Ron Howrigon
Ron Howrigon

People don’t become obese overnight, and this healthcare system didn’t develop its current problems overnight either. This means that the solutions won’t be easy, and they won’t come from simply forming an ACO, having some meetings and praying for the best. It’s going to take hard work, a great deal of effort and a very long time.

I’m not saying that the ACO movement is all bad, but I am warning that it’s not going to be as easy as most would probably assume. True cost control must involve a number of variables at a fundamental level.

  1. Physicians must be at the center of any change.  This problem will not be solved by governments, insurance companies or hospital administrators.  They do need to be involved with the change, but only in a supporting role. True change must involve the people who understand healthcare the most and who not only see the waste in the system, but can do something about it. Yes, I’m talking about doctors. Without physicians at the center of this change, it’s as doomed to failure as my brief experiment with the “all ice cream” diet.
  2. Change cannot be driven on the backs of physicians. We now have significant data that shows physician income has not kept up with general inflation. We also know that most physicians report working longer hours than ever before, and the famous timesaving invention – the electronic health record – has failed on its promise to make doctors’ lives better. Enough is enough. Physician income is not the problem with our healthcare costs in this country, and we simply can’t balance this account on their backs. We need a fundamental change in how care is delivered to reduce costs, but it needs to be done without negatively impacting their incomes.
  3. We need a fundamental change in how we pay physicians and what we pay them for.  Brand new concepts like patient management and population health management need to be developed. We must transition away from paying doctors to do and fix, and start paying them to manage. This all needs to be implemented in such a way that physician incomes don’t decrease.
  4. Physicians need to be protected from frivolous litigation so they don’t have to practice defensive medicine. Enough said.
  5. Society needs to do its part.  We can’t keep people in this society insulated from their own bad choices. If you speed, your auto insurance goes up. If you smoke, your life insurance goes up. If you don’t have smoke detectors in your house, your homeowners insurance goes up.  Why then, shouldn’t your health insurance go up if you are an overweight smoker who won’t try to lose weight or quit smoking?  Society has to step up and do its part so we aren’t just trying to battle diseases like diabetes or cardiovascular disease with pills and operations.

Given that very few of those five items are currently being done, what are physicians to do in the interim?  Since I don’t believe the “stick your head in the sand” strategy is a good one, physicians need to get involved, but do so with their eyes wide open.  Listen to your hospital when they are talking about an ACO.  Engage the payers in discussions about alternative payment mechanisms. Talk to your patients about how they can help manage their own health. Talk to politicans about how they can help.  Make sure you have good business and analytical help with this journey. In short, do what you can to guide this change in the direction it needs to go rather than just sitting back and watching what happens.

We know that things are going to change.  They have to.  What we don’t know is how they are going to change.  Remember, if you don’t like change, you’ll like irrelevance even less.


Ron Howrigon is President and CEO of Fulcrum Strategies, a physician consulting and practice marketing firm.
(Photo by Ken Teegardin via Flickr)

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