Integrated Healthcare Through ACOs: Unlikely Bedfellows Must Get Cozy

Just like marriage, hospital and physician alignment means forming a relationship focused on sharing things - like power, resources, risks, and outcomes. Unfortunately, like a real marriage, sharing stuff (whether it’s milk or a sick patient) is easier said than done.

With the recent ACO proposal making waves across cyberspace and in doctor’s offices, there are a number of questions as to how “sharing” might transpire (For example, to what extent will hospitals court physician practices to unite into one solid network?).

But learning to share is exactly what will be required if providers want to reap financial gain and better patient outcomes in today’s integrated-healthcare movement, according to a new report released this morning by healthcare consulting firm PwC.

PwC’s report “From courtship to marriage Part II: How physicians and hospitals are creating sustainable relationships,” the second of a two-part series, delves into a few ways hospitals and physicians - including those in private practices - can improve patient care and save money by getting comfortable with one another.

“Moving from a fee-for-service model to an outcomes-based model is going to be about quality and transitioning patients across the continuum of care,” Warren Skea, a director in PwC’s Health Enterprise Growth Practice, told Physicians Practice.

Skea gave an example of how an ACO partnership might work in a heart failure patient, one of the biggest Medicare "fee-for-service" patients discharged out of hospitals. “Those are the frequent fliers; you’re seeing those patients back and forth five times a year,” says Skea. “It’s more important to manage those patients, keep them out of the hospital.”

In an ACO-like partnership, a patient’s hospital-based cardiologist is more likely to share information with that patient’s primary-care physician, from the medications he prescribed to the interventions he tried. That kind of information and care means fewer hospital readmissions, which translates to lower costs and better outcomes, said Skea.

“If there are five readmissions per year for a heart failure patient and you can decrease that to three or two that’s very high,” Skea said.

Even though more practice-based physicians are cozy with the idea of snuggling up with hospitals that they may have had frosty relationships before, there are still some concerns. The first is money. According to the report, PwC’s 2010 survey of about 1,000 physicians revealed more than 80 percent of physicians who are considering hospital employment said they expect to be paid the same as or more than they are now. When asked how much more, the average increase was 2.4 percent. Fewer than one in five physicians surveyed said they would accept a pay cut to work for a hospital.

Another concern is that physicians want to be part of the bigger picture: More than 90 percent of physicians surveyed by PwC said they should be involved in hospital governance activities such as serving on boards, being in management, and taking part in performance improvement.

“I think there’s going to be challenges around different expectations,” says Skea. “One is compensation, the second is governance, and the physician’s role in governance, and the time and skill set required to fulfill the issues that need to be resolved in order for an integrated network to be successful.”