The PHO in Methodist's case is a fifty-fifty joint venture between the hospital and the physicians who practice there.
"If you take a PHO and you give them the bundled payment, they are in a good position to make sure the payment gets shared fairly," he says. "The interesting thing about the ACO is that they're not hospital- or doctor-centric; they're patient-centric."
One of the key pieces, he says, is being able to share medical and financial information across all the constituents so that they can move toward outcomes as the key metric. That's what many payers attempted to do in the 1980s and 1990s with capitation—an annual fee provided to a medical group for taking care of a certain number of patients. It was largely abandoned because most hospitals and physician practices were much less sophisticated than payers in analyzing risk among large groups and lost money under it. However, Mayzell believes experience with capitation will prove valuable as physicians and other healthcare organizations progress to ACOs.
If ACOs are to succeed where capitation failed, the group needs critical information about outcomes and utilization, he says. That's possible now.
"Capitation did some good things. It pushed risk down to the physician level and put them in control, but it didn't give them the information to really manage the patient's care," he says. "When capitation was in vogue, we didn't have the EMR capacities we have now. We have better tools, and we're better evolved in financial and clinical integration."
Many physicians worry that healthcare reform legislation will eliminate patient choice and physician independence. Those skeptical of that stance believe that preserving physician "independence" is a red herring and that physicians were thinking more about their own pocketbooks in largely opposing the law. But the truth is, compensation is likely to fall, especially among specialists.
Critics have another word for independence: variability—in other words, alternative approaches in how two physicians might treat the same ailment.
Variability has been shown to be an enemy of quality and coordination of care, two key principles necessary to cut healthcare costs, they contend.
Variability has been both paraded and pilloried under other terms, such as evidence-based medicine, which opponents like to call "cookbook medicine." But that debate has already been settled, as perhaps a majority of experts—physicians themselves—agree that the vast majority of clinical decision-making can, and should, be standardized. Whatever your politics, the influence of the rugged individualist physician is likely to be curtailed under the ACO model. However, many believe that the influence of physicians as a group will be the key determinant of best practices in patient care.
For instance, Ron Greeno, MD, founder and chief medical officer of Cogent Healthcare, a Brentwood, TN, company that provides hospitalist physicians and programming management to hospitals, says healthcare teams, with the physician at the head but with accountability running from the top of the provider food chain to the bottom, will likely form the backbone of the ACO.