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Accountable Care Organizations and Physician Alignment: The Former Doesn't Guarantee the Latter.

June 23, 2011

Although Accountable Care Organizations are seen by many as a panacea, we pointed out in a previous entry that formation of the entity changes nothing:

“The reality is that forming an ACO – putting the legal entity in place, does not somehow change the coordination of care, the quality of care, the patient experience, or reduce cost by even the first dollar.”Another fallacy is that forming an ACO, particularly built around an employed physician model will “solve” a physician hospital alignment problem.  Nothing could be further from the truth.  If a hospital’s goals, vision and incentives aren’t already aligned with the medical staff, the employment/ACO model not only won’t fix it - some realize that an ACO probably won’t work!

A recent survey by AMN Healthcare found that some hospitals aren’t forming an ACO specifically because they lack physician alignment.  The number one barrier to forming an ACO?  Physician alignment.  The number one reason cited for NOT forming an ACO?  Physician alignment.  It would seem that we have a physician alignment problem?

Every healthcare reform effort is built on the assumption of greater physician-hospital alignment.  Further, many hospitals assume that physician “integration” happens through employment, business joint ventures or forming some legal entity like and ACO or Clinical Co-Management relationship.

In this regard, recent healthcare reform efforts have not changed the reality:  Alignment of goals and integration of the medical staff, independent or employed, requires real work to define the goals of both parties, find or create common interests, identify the right mix of alignment strategies and ALWAYS start with the blocking and tackling of improving basic operational efficiencies that improve productivity, quality and the patient experience.

The best approach:

    • Define what the medical staff should look like.  What competencies are we looking for in our physician-partners?
    • Change the recruiting, hiring and acquisition approach to focus on these competencies.
    • Clearly and specifically identify goals and cultural and operational success factors.
    • Attend to the daily operational issues that impact the physician’s career satisfaction, the quality of care and the patient experience.
    • In some cases, the greatest level of alignment occurs without any new entity or grand business venture.

Surprise! There is no single silver bullet solution to improving physician alignment.  Yet, we are spending millions of dollars to form ACOs with little or no attention to creating situation-specific, sustainable, physician-hospital partnership models.  Or worse yet, we try to adopt a one size fits all solution. For instance – contrary to the marketing efforts of leading consulting firms, the clinical co-management model does NOT fit every situation.  Similarly, we may find that we can improve care and control costs without the ACO model.

Reducing Turnover in Healthcare

Bryan Warren Bryan Warren was the former Director of Healthcare Solutions at PSI. He was responsible for developing and promoting tools and services designed specifically for the unique challenges faced by healthcare organizations.