Impact Analysis PREVIEW: Post-Reform Physician Alignment in the Community Hospital

Jim Molpus, for HealthLeaders Media , March 13, 2012
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This article appears in the March 2012 issue of HealthLeaders magazine.

As the healthcare industry moves toward new models of care and accountability, several leaders share their experiences and strategies for success. 

This is an excerpt of a HealthLeaders Media CEO Roundtable held near Palm Springs, CA, in January. An Impact Analysis report, featuring an extended transcript, analysis, and video clips, will be available online after March 27 at

Jim Molpus, HealthLeaders Media: Our annual industry survey asked clinical and executive leaders if their healthcare organization would be joining an ACO of any description in the next three years. It was a virtual tie, with 51% saying yes. Does this response suggest some growing ambivalence about accountable care among leaders? How do you view that universe and what, if any, structures do you have in place to pursue it? 

David Brooks: It depends on the day. The cliché here is that we want the AC part of ACO, not necessarily the O. So we certainly are pushing toward creating more accountable care, which means integrated care, responsible care, and organized care. Being part of the Providence system, we have some central system resources and we conducted a comprehensive ACO review for every market. We started it at Everett because we've probably got the more organized, integrated delivery systems within most of our communities. Our benchmark would start where we're already at—which is already very low-cost, high-performing, at least as measured by utilization. So we're struggling with figuring out what's the economic upside to invest a lot on the structural side if we're already achieving a lot of those outcomes. 

Diana Hendel: At MemorialCare Health System we are keenly focused on comprehensive integration of all aspects of our delivery network. When it comes to physician integration, in California, like Texas, we aren't able to directly employ physicians. That's why we're seeing a surge in medical foundation-type arrangements to allow a formal integration model for physicians. When we unveiled our foundation early last year, the timing was perfect since we had ample time to learn from other health systems' trials and errors over the last 15–20 years .... With regard to the Pioneer ACO, we went through the first pass and made the first cut. But similar to Providence Everett, we found we were already performing at a high level and that the  Pioneer ACO did not create the yield needed to justify moving forward.

Ed Jeffries: The short answer is that we do not plan to pursue an ACO in the near future for many reasons that have already been expressed in terms of the potential benefit to be gained versus experiencing the cost. Unless we change physician behavior we are going to have difficulty no matter what type of reimbursement system we use. We're pursuing a medical home right now with one of the local insurance companies. So we're going to use that experience to refocus and retrain our physicians in terms of how they currently deal with patients on an individual basis to a population-based approach. We will learn, move forward, watch what happens around us, and try to learn from other people's successes and mistakes. We will probably participate as providers in some of the ACOs but we are not going to have financial involvement with any of them.   

Halfen: There's a viewpoint that 22% of the healthcare expenses are on complications of care that could be reduced, and that's $400 billion that could be reduced yearly. And we're looking at our own selves and what we've done to reduce those expenses. What we really are looking at is not accountable care organizations, but accountable care contracts with payers that will reimburse us for what we are saving them at this point in reimbursements for our expenses.

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