May 30, 2011 in Media Center, News by admin

Successful Physician Alignment

By Dr. Michael G. Cassatly

The Affordable Care Act encourages the formation of ACO’s where the participants in a patient’s care will share the payment for treating a patient based on the patient’s outcome success. So, rather than pay hospitals, physicians, and other ACO members for their individual portion of a patient’s treatment, the Center for Medicare and Medicaid Services (CMS) will instead pay one lump sum to all the involved participants for the bundle of services encompassing the entire episode of a patient’s care. Thus, the financial reward and the risk are shared collectively by all members of the ACO…….. each individually must succeed in order for all to succeed. For example, a substandard performance by a single provider causing the patient’s outcome success to fall below the CMS benchmark will reduce the amount of money received by the ACO. Consequently, a poor performance by one member of the ACO, affects the profitability for all members of the ACO.

Due to this shared risk and reward, in the current issue of the Journal of Medical Practice Management1, I have proposed a new term to better define the ACO business structure. The term, Stakeholder Partners, is defined as a mutually beneficial relationship in which the organization and the stakeholder must partner in order for each to succeed.

In the article, I discuss the critical and fundamental contrasts between physicians and other ACO members. Specifically, physicians are a group of individual heterogeneous entrepreneurs that tend not to act in a collective manner. This is in distinct antithesis to the other possible ACO members, such as hospitals, pharmaceutical companies, medical device, and yes, even medical insurance companies. These ACO members are well organized businesses with established strategic plans, communication systems and efficiency metrics.