Scope of a Miracle

It is good to see photographs of U.S. Rep. Gabrielle Giffords that became available to the public today. Few people know all the details of the kinds of care she received that made possible the near miracle of her survival and recovery. There are surely many physicians, surgeons, nurses and others who together made this possible. She is alive and recovering today because of the coordination of the efforts of many professionals. In other words, it was not only the skills of individuals who saved her life and promoted her recovery. It was the timely coordination of those efforts. In this case, the "system" of care worked. I want to believe it would have worked as well for any person who suffered her injury.

As I read some of the comments received by HHS regarding proposed rules for implementation of ACOs I see the strong expressions of good people who simply do not want government agencies to attempt to rationalize the healthcare delivery system. Some people are simply opposed to "socialized medicine" and/or define the proposed changes as a loss of freedoms won on battlefields around the world. Others are open to change but do not believe that the new law and the proposed rules will work. Rep. Giffords' recent experiences with the system could be cited either as evidence that what we already have can work; or to say that we can do better. I want to believe that we can do better for at least all American citizens, including the large numbers of people entering the Medicare program. I believe that the rationalization of medical processes can reduce costs and produce more consistent quality outcomes for all patients.

It is a safe guess to say that the implementation of the new law will produce unintended behaviors among providers. The system that produced the law is a political system. Democratic political systems cannot produce scientifically rational policy designs, as in the context of operations research which is rational in a more objective way. Politics is the art of what is politically possible. As we pray and hope for Rep. Giffords' continued recovery let us continue to hope that the new law which she supported in Congress with her vote backed by her courage can be implemented successfully. "Bureaucrats" have to run with what they are handed by others.

What is the role of competition within an ACO?

I am reading the last chapter of the book Accountable Care Organizations: Your Guide to Strategy, Design, and Implementation by Marc Bard and Mike Nugent. It is well worth the time and thought to read. It appears to me that if they work, ACOs are more likely to be successful in large urban areas where there are large populations of people and large numbers of hospitals and physician groups. The idea is to scale up "production" by designing efficient and effective care pathways. In an urban setting multiple ACOs can exist and as a result there can be a constructive combination of efficiencies within ACO networks and constructive competition among multiple ACO networks. Hospitals and physician groups can "shop around" and even participate in multiple ACOs within a large urban market.

But it is not apparent to me that this is going to work well in smaller markets that lack enough population base to support multiple ACOs. If there is only one existing local hospital and no large physician groups then it appears that there is only one potential "game in town." The challenge there will be the usual one of trying to align the interests of physicians with the interests of the hospital, given shrinking revenue from government payers. But what about the situation in which there are two or three local hospitals in a city and they have a long history of unhealthy forms of competition including frequent law suits? To create an ACO governance body composed of people with long-standing local institutional loyalties is going to be difficult. I am concerned that Medicare beneficiaries and others in such places may lack adequate care because in the absence of an ACO local institutions will not have adequate financial resources to provide quality care. If long-term competitors cannot get past their issues and competitive interests they may be unable to form an ACO in small to midsize places.

Just as Certificate-of-Need legislation led to accelerated spending for costly medical technologies in the 1970s it will not be surprising if the Patient Protection and Affordable Care Act will lead to many attempts by local hospitals to buy out other local hospitals and local physician practices. Coordination that may not be otherwise possible is possible under unified ownership. But there are still laws on the books that prevent some acquisitions and that make it illegal for the very entities that should be talking about forming ACOs from discussing financial matters because such conversations would be anti-competitive. What it boils down to is, do we believe in competition or do we believe in networks based upon cooperation, coordination and trust. It seems as if we want hospitals to compete with each other while at the same time being partners within ACO structures. How can the people who govern an ACO also fulfill their responsibilities to individual institutions engaged in competition with ACO partners?

One of the things that Bard and Nugent advocate for is tightly coupled systems. Can a system be both tightly coupled and internally competitive? Is it reasonble to insist on what amounts to consolidation of institutions while at the same time forbidding hospitals and others from engaging in behaviors that are illegal because they threaten competition?

Yarnell Beatty Speaking on Accountable Care Organizations

Attorney Yarnell Beatty speaks here regarding what is now known and not known about Accountable Care Organizations, as outlined in the new healthcare policy.