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Health Care Interests Push To Make ACOs Pay Off For Them

A new model of care encouraged by the health law – accountable care organizations – has set off a feeding frenzy among industry groups intent on getting a slice of the action, or protecting their own financial interests.

“ACOs are the latest fad,” said Dan Hawkins, senior vice president for policy and research at the National Association of Community Health Centers. “I call them the hula hoop of health care because everyone wants one even if they haven’t actually been defined anywhere. The whole doggone health care community is in a frenzy to own and dominate these ACOs.”

For now, ACOs are just a concept – federal regulators haven’t yet drawn up the rules. As envisioned by the law, ACOs would be integrated delivery systems involving doctors, hospitals and other providers whose pay would be partly based on meeting certain quality and cost targets. The goal: to improve care and slow rising costs. Medicare will start using them in 2012; many providers already are developing them for the private insurance market.

A meeting in Baltimore hosted by federal officials – to discuss how to set up the new organizations without violating antitrust and anti-fraud laws — last week drew more than 300 health industry representatives. Besides the usual suspects – groups representing physicians, hospitals and insurers’ – the session attracted medical device makers, employers and labor unions, nurse practitioners and pharmacists, all of whom want to ensure that ACOs expand their business and influence. Many are worried, though, that ACOs, if allowed to become too powerful, will result in less money and fewer patients for them.

ACOs are the “wave of the future,” said John Coster, senior vice president of government affairs at the National Community Pharmacists Association. “So we either get on the train or get run over by it.”

A sampling of what’s at stake:

Device makers worry ACOs could encourage doctors to use less costly devices instead of what works best for the patient. “We are worried about the market power ACOs may wieldand it may present significant risks to patients,” said Ann-Marie Lynch, executive vice president of the Advanced Medical Technology Association, which represents medical device makers.  Her group is pushing for safeguards in the ACO rules to make sure new technologies are not discouraged and independent monitoring to make sure patients get appropriate care.

Labor unions and employers fear large hospitals will grab more market power enabling them to increase prices for care.

Elizabeth Gilbertson, chief strategist for the Hotel Employees and Restaurant Employees International Union Welfare Fund, said she is hopeful about the ACOs but worries that they might push up costs if they get too big. The fund helps pay the health care bills for a total of 280,000 workers and their dependents.

Employers are looking to ACOs to improve care for their workers and slow rising costs. “We have not been getting our money’s worth and quality of care has varied,” said Mary Jo Condon, director of public affairs for the St. Louis Area Business Health Coalition.

Pharmacists see themselves “as partners with doctors and hospitals” in ACOs in helping ensure appropriate drug use, which could lower spending, said Coster. 

Pharmacists would be reimbursed for their services and share in the potential rewards of delivering better patient care. He added that the relationship also carries financial risks if pharmacists can’t help control drug compliance.

Manufacturers of medical imaging and radiotherapy technology are worried that the financial incentives to slow spending in ACOs could hurt sales. If the primary goal of an integrated system is to hold down costs and utilization, said Dave Fisher, executive director of the Medical Imaging & Technology Alliance, an industry trade group, “the incentive is to reduce the volume of procedures” —  including diagnostic tests such as MRIs, CT scans and ultrasounds —  “regardless of whether or not they’re appropriate.” 

Fisher said ACOs will prod doctors and hospitals to join forces, and to consolidate. “We just want to be sure it’s done in a fair way that preserves competition,” he said.  

Home infusion companies see ACOs as a way to get Medicare to expand coverage of their services. “We are evaluating this model because it has the opportunity to be a game changer,” said John Magnuson, vice president of National Home Infusion Association. “This could be a way to open the door to home-infusion therapy in Medicare,” he said. Home infusion therapy involves delivering intravenous drugs to people at home.

Community health centers are uncertain if they’ll be winners or losers in ACOs.

Hawkins, of the association of community health centers, says he’s advising his member to hold off joining any ACOs until they know more about them.

On the upside, he said, community health centers that join an ACO might have an easier time securing diagnostic services and treatment for their patients. But they risk losing their autonomy and distinct character as safety net providers and could face pressure to lower costs.

Related Topics

Cost and Quality Health Industry The Health Law