Sometimes, reality just delivers – this morning in the form of some funny Google search results.
Aghast at the fluidity of my acronymic spew in an email exchange with a colleague (“ACOs can be MSOs instead of PHOs because Stark now safe-harbors EMRs for IPAs, so the PPMs and hospitals can share IT to TPA the risk piece, and…”), I decide to brush up on these new-fangled entities in the health reform law called “ACOs,” or Accountable Care Organizations.
In case you’re still stuck back on page 689 of the law, the ACO is This Year’s Model – the TLA (Three Letter Acronym) with Big Mo. An ACO is a contracting entity, codified in the health reform law, through which a group of physicians and a hospital or several hospitals work together to share in the financial risks and rewards associated with patient care. Sound eerily familiar? To me, the concept sounds like a bad movie I once saw – a really long and dreary drama with nothing close to a Hollywood ending. Or maybe it was a bad waking dream I had while dozing at a population risk management conference in 1998, thanks to a slight fever, two Sudafed, and half a bottle of Robitussin. Or maybe it was something I read that same year.
Hospital and physician integration has become ‘thinkable’ now, if only because physicians and hospitals finally recognize that they will sink or swim together, thrown as they have been into the same turbulent, unforgiving waters of a self-correcting marketplace. As a reaction to the cost crises of the 1980s and early 1990s, government and private purchasers – directly and through MCOs [managed care organizations] – have blamed both hospitals’ and physicians’ self-serving clinical behaviors, inefficient practices, and excess capacity as the main driver of their own health care spending woes. This is precisely why the purchasers turned the MCOs on them in the first place. This is why MCOs have been positioned as the enemy of both types of providers. And the enemy of my enemy is my friend, or so the thinking goes.
OMG, that was some big thinking! So the purpose of the 1998 vintage ACOs was to punch the MCOs (i.e., the 1998 vintage HMOs/EPOs/PPOs/POSPs/MOUSEs) in the nose. OK! But more on this little artifact in a moment.