According to a study on the U.S. health care system by the Commonwealth fund, the expenditure on health care in the U.S. was $9,086 per person in 2013, which corresponds to 17.1 percent of gross domestic product (GDP). This level of health care spending as a percent of GDP is higher than that of many other developed countries like Germany, France and the U.K., yet many health care quality metrics, such as life expectancy and infant mortality, are lower in the U.S. than in countries that spend less on health care. Many health policy makers believe that the traditional fee-for-service payment structure, which incentivizes high volume rather than high-quality care, is a main contributing factor to the high cost of health care in the U.S. The fee-for-service system is thought to be at the core of fragmented, high-cost, procedure-oriented care in which the physician has no responsibility for quality, outcome or cost.
The Affordable Care Act, or “Obamacare,” laid the foundation for the creation of a new way of reimbursing health-care providers and provides a way to change to a system of coordinated health care delivery based on quality for low cost. Accountable care organizations (ACOs) play a key role in this new health care delivery and payment model. The key features of an ACO are that reimbursements are tied to:
- Quality metrics;
- Reduction in total cost of care; and
- Assigned populations of patients.
Many of the earliest ACOs were hospital-led because, with the financial accountability and risk associated with the shift in model, physicians did not have enough capital to be at risk for financial losses. Accordingly, physicians had little or no input in the decision-making process in many hospital-led programs.
In 2014, the Centers for Medicare & Medicaid Services (CMS) released data that showed only 54 of the original 114 ACOs were successful in reaching their goals in the program’s first year. Of the 54 successful programs, only 29 received an added bonus. Interestingly, 21 of the 29 programs that received a bonus were led by physicians. Furthermore, the added bonuses for physician-led programs were consistently higher than those received by hospital-led programs. This data clearly illustrates the importance of physician leadership in health-care reform. Many hospital-led programs that could assume financial risk did so without physician leadership or with only one chief medical officer in a secondary role. Because physicians in those models have only theoretical control, many felt powerless and did not commit to the performance goals due to lack of input.
The early ACO experience was one of the main reasons for the growth of physician-led or shared hospital/physician leadership model. In a recent report on “The Impact of Accountable Care,” Tianna Tu and partners reported the rapid growth of physician-sponsored ACOs. There are currently 744 ACOs, with 37 percent led by physicians, 35 percent led by physicians and hospitals as co-leaders and 28 percent with hospital-only administrators.
This data supports the idea that when physicians and surgeons are in leadership positions with significant and meaningful input into decision making, health-care reform becomes more successful. However, this situation also means that physicians need to become educated in business principles and leadership to communicate the clinical picture that will lead to improved quality of care and success in an ACO effectively. Clinical decision making and patient-centered care are the physicians’ “core business,” and their input cannot be substituted by administration experts alone.
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