AANS Neurosurgeon | Volume 26, Number 2, 2017

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Mergers, ACOs, Acquisitions...

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Cover ACO 4Gosh darn it (you may be thinking), I did not work so hard through eight years of college and medical school, seven years of neurosurgical residency and maybe a year (or two?) of fellowship just to be bogged down with all of this nonsense that has nothing to do with anatomy, physiology or surgical technique. Heck, I trained and want to do brain and spine surgery! All that other stuff is supposed to take care of itself! 

Well, it won’t. Nor did it, ever. Since the days of prehistoric shamans, healers have had to run the business side of their practice. Bartered farm animals became precious metals or stones, then coins, cash and most recently, credit card payments. Priests became physicians who relatively recently let surgeons into their fraternity. The onset of third-party insurance and government-run payment systems was a huge change worldwide over the last 70 years. The socioeconomic ground under doctors’ feet has been shifting for millennia. And now, like many things around us, it is changing that much more rapidly. The concept of fee-for-service care, the most obvious, simplest, commonsensical and widespread way to charge and collect for services rendered, is under siege. 

All doctors, including neurosurgeons, will ignore this change at their peril. One may scoff at the notion of value-based payment – but that system is coming. At first, the relative ups or downs in reimbursement may seem relatively minor, but soon enough, “quality” may be the single biggest factor in deciding how much you get paid. So who will define such quality? Doctors or economists? Neurosurgeons or hospitalists? If you remove a 4.2 cm vestibular schwannoma in someone with minimal hearing who then loses hearing in that ear from surgery, has the smallest facial asymmetry, some mild local scalp pain and occasional dysequilibrium, is that a good outcome? Be prepared for it not to be – unless we have a seat at the table where these measures are defined. In the Feature article, “Comprehensive Quality and Value Programs: The Impact of Hospital Systems and Mergers on the Future of Neurosurgery,” the author explains how the involvement of neurosurgeons is critical to continue providing quality care.

There is a good chance you are working with, or for that matter for, a hospital or system that is seeking to expand to protect “market share” and to achieve “economies of scale.” Is that a good idea? The answer may depend on where you live and work, and who is doing the expansion. Is bigger better, or is small the way to go? Read the “Point: Making the ‘Big’ Feel ‘Small’ Furthers Health Care Quality, Excellence and Savings” and “Counterpoint: Super-sizing Health Care and Large System Flaws” articles to help you decide.

Who will coordinate the neurosurgical services in these enlarging networks? Will everyone keep their jobs? Again, we need to be involved in these decisions. Our absence will be mistaken, or for that matter taken, for apathy, and we will then have to live with the results.

Remember capitation from some 20 years ago? For those who do not, it was the idea that fee-for-service payments could be replaced by paying large entities (medical groups, hospitals, health care systems) upfront based on their number of “covered lives.” If the “entity” spent less than they were paid, ka-ching! More money is made. However, if costs exceed payments, then money is lost, and everyone involved takes a hit. Capitation creates a disincentive to provide care, and the notion died a merciful death in the 1990s. Now, it has come back with a vengeance in the form of ACOs – Accountable Care Organizations. How did this pig acquire lipstick? By introducing the above mentioned concept of value-based payments. If large groups and the physicians within them are paid for quality, the capitation concept can be justified. If it is better for a patient to not have surgery, voila – you get paid more than if you did it! To read more about how money plays a role in ACOs, browse the Feature article “ACOs, Acquisitions and Mergers: Do These Business Plans Really Save Money?”

Neurosurgeons may be able to carve out a system-within-a system wherein they get paid on a fee-for-service basis, while the ACO to which they belong receives the capitated payment. In essence, you would contract in a traditional way with the ACO to provide neurosurgical care. In order for this to happen, we have to be in those discussions, or our slice of the pie will be smaller than need be.

As a society, we have two choices: We can pay for too much medical care or too little medical care. Until now, there has been a consensus in the U.S. that we prefer too much, but that has changed. As a relatively small specialty that costs a lot to maintain, neurosurgeons have to understand this change and understand how we can work within an evolving world to ensure that our patients’ needs are met, and yes, our own as well.

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