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Accountable Care Backgrou
Specific Concerns
Winners and Losers


Some Concerns Regarding Accountable Care Organizations in General


Returns to an ACO member--how much does one stand to make?


I estimate that for every 1% end-of-year savings compared to the 2010 standard of $10,000 per beneficiary, and assuming a generous model of 5% administration cost, 15% hospital share,

(~20-25 internists per 5000 patients) share of 65% & specialists share of 15%, that hospital and administrative rewards will = $50k, internists will make ~ $8,150--6,500 and ~ 100 specialists & surgeons ~ $400.


FUTURE of ACOs:  There is little doubt that once savings are demonstrated by ACOs, these savings are going to be expected in the future and physician and facility reimbursement will drop to those demonstrated in 2015.  Possibly physicians not in ACOs could see an even further drop in reimbursement, so as to force them into ACOs.  


ALTERNATIVE TO ACOs:   Physicians have other options with which to combine forces and share saving, such as IPAs, MSOs.  Physicians have other means of supplementing their income that would likely lower their malpractice risks, such as partial or hybrid conscierge practice, where 5-10% of patients receive preferential treatments and non-medical perks, in return for flat fees additional to medicare or their in network insurances.  This is a very viable option for most physicians and I will have more on this in the near future--


ADMISITRATIVE AND START UP COSTS:  These could be huge, particularly as lawyers will be needed to draw up and maintain contracts amongst physicians, hospitals, labs and facilities,  and a multitude of accountants and billing specialists to track data, and a new layer of physician administrators spending a lot of time.  Dr. Shulkind, CEO of Morristown hospital, for instance, estimated start up costs at 10 million.


An ACO will help physicians and hospitals work more efficiently, and provide higher quality care:  certainly we can all envision individual situations. Larger programs where hospital and doctors combine could, for instance, improve quality by purchasing a Van to transport disabled patients to doctors or clinics, meals on wheels, more intensive home care and telephone reachout programs, better coordination and chart sharing, and better coverage arrangements.  According to Ponam Aleigh, former Health Commsioner of NJ, Medicare ACO's will not benefit from changing brand to genertic medications, but this may accrue in commercial ACO contracts, which are sure to follow in the early parts of 2012.


LEGAL RAMAFICATIONS: a number of physicians and Malpractice companies forsee the following:


1.  A potential for a feeding a frenzy of successful lawsuits by introducing an inescapeable profit motive in physician decision making, possibly leading to punitive damages which not covered


2. ACO's represeting a new source of deep pockets that could fuel a fresh pursuit of multimillion dollar lawsuits.


3. Committe particiption setting policies that could get challenged in court by patient who feel they have been harmed-- for instance, 1999 case at Johns Hopkins where a resident discharged a 53 male without doing a PSA, after a proper informed consent discussion mentioning the guideline that PSA's do not change life expectancy.  An internist obtaing a screening PSA without any prior discussion, found advanced Gleason 8 prostate cancer, and the patient then successfully sued Johns Hopkins for $ 1 million for adhering to an inappropriate or wrong guidelines, even though all major society guidelines supported the resident's position .  The resident was absolved--Please see his brief article and account of the trial in JAMA as attached, called "Winner and Losers".


4. Committe participation in disenrolling certain physicians for "not being like minded" leading to a countersuit for restriction of trade.  Patricia Constante, CEO of MDAdvantage has told me that ammendments are available to help protect members serving on ACO committees.  Ms. Constante and her senior VP agree that there is no clear claims experience, but suggests that an administrative ACO member should consider special policy riders or ammendments, as protection for administrative actions is not a usual part of malpractice policies.


5. Some of us, jokingly, entertained scenarios the opposite of EMTALA--Cannibalism by a rival ACO who entice away certain patients and performs very expensive workups or treatments, such as CABG, valve surgery, CancerTx or transplant or neurosurgery, running up the bill for the original ACO. 


I welcome and would consider for inclusion any cogent suggestion and concerns.