Accountable Care: How Wide Is the Gulf?

A very smart fellow recently said to me, essentially, that ACOs that are founded on outdated legacy structures are doomed to fail. I have been thinking about this ever since. The real question he poses is whether some organization, purpose-built around a specific mission, can re-invent itself to fulfill a different mission or whether it is a prisoner of its own legacy. 


Of course, the first question is whether, for example, hospitals are being challenged to “produce” something really different under an ACO program or if it is just a modest adjustment, even a relabelling with a buzzword.  In my view, if hospitals (as the given example) believe the ACO model is just a relabelling, my smart colleague rests his case.  


Indeed, under an accountable care model, the ACO drives to achieve the Triple Aim, which means that all of the participating entities need to be aligned to do the same through their own efforts. Unless the reality of how everything is truly wired matches up to this higher  mission, the ACO label is just window-dressing. 


My smart friend believes it is an unachievable stretch for hospitals, in particular, to overcome their historcal business models.  Therefore, to use that as the centerpiece of an ACO is doomed to fail.   The same could be said for IPA's if they are simply a contracting vehicle to garner marketshare through insurance company contracts, but whose core practice models are still rooted in traditional fee-for-service healthcare.  The hospital's mantra has always been "heads in beds" and that of the fee-for-service physician practice has been "production of billable services".  


Instead, he believes in a more "clean slate” approach: starting over with a Triple Aim mission.  However, he recognizes that, in reality, in order to work on a national scale it requires the transformation of the healthcare delivery  system across the country:  starting over completely is unrealistic. The strategy to achieve this must be tied to setting our sights on the new functions required to live up to accountable care values, not insisting on layering on top of old forms. This says that we should  accept, even applaud, failures as testimonials to attempting this radical change without systemic alteration of the old business models.  Witness the failures of so many MSSP ACOs (not wiithstanding the intrinsic flaws of the CMS-designed model). However, I suppose he would say that we should particularly celebrate the successes wherever we find them, and we should not prejudge them based on just a first look at their forms or structures. 


This issue came into sharper perspective when I read a New York Times article regarding the ascendany of Apple over Microsoft over the decades in terms of their relative market capitalizations.  The article cites the vision-driven Apple juggernaut of constant innovation, particularly in terms of cannibalization of their current products in favor of driving to replace them with their own new products, choosing to make the old products obsolete with their own hands.  This, perhaps, is what my colleague envisions in healthcare in terms of transformation in order to pursue the goal of the Triple Aim. 


With some sense of guilt, I reflected upon an era many years ago when I led the provider contracting movement for a healthplan that pursued a global capitation model with organized groups of physicians.  It generally worked so marvelously well in our home marketplaces in Southern California, we reasoned, why shouldn’t it be exportable to other markets, as well?  And so we pursued a franchise model to create clones of the Southern California examples in other markets around the country.  


When attempted in other states, we witnessed markedly different degrees of success, and even complete failure in some cases.  Why was this?  In successful cases, the provider groups “drank the Kool-Aid”, as they say.  They took in the whole philosophy, its strategy and its enabling methodologies to transform their practices.  In other cases, not so much.  Truly, other “wanna-be’s” simply imitated what they thought they witnessed in the successes elsewhere, but they merely layered it superficially on top of what already existed without replacing it entirely.  It was a band-aid approach that failed to take root and overtake the original paradigm.  In the end, the failure lay in the lack of strategic clarity about what was truly needed plus the collective will to make it happen.  There was a failure to transform the mission and vision of the provider organizations that crashed and burned. 


So I believe what my learned colleague says about "form before function".  The gulf to be crossed to accountable care is as wide as the moat we have dug called to preserve “business as usual”.  In my view, the willingness and commitment to transform our provider organizations must amount to a brave cannibalization of what has worked up to this present day, and a well-informed leap across to becoming the vehicle that adapts and survives under a whole new paradigm, replacing the old with the new. 

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