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Boy, Were the "Experts" Wrong This Time

July 10, 2012
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The new accountable care organizations joining Medicare’s ACO program represent the full spectrum of patient care organizations—and markets—in healthcare today

Why is the received wisdom so often wrong? We can all think of examples from the worlds of politics, sports, entertainment and culture, among many spheres, situations when the best-known “experts” in any particular area were all absolutely certain that “X” would be true. And then it turned out they were all wrong. A variation on this is the situation in which the best-known “experts” were all wrong, but some quiet sages got it right; a recent example of that phenomenon was when many well-known political commentators expressed certainty that the Supreme Court would either fully strike down the constitutionality of the Affordable Care Act, or at the very least, declare the individual mandate for health insurance purchase to be unconstitutional. As we all know, the nation’s highest court held most of the Act constitutional, though it did so on a different conceptual basis from that which had been expected. What’s more, most observers even got the lineup of justices wrong.

Meanwhile, when it comes to the development of accountable care organizations, I have to say, a lot of people were proven wrong earlier this week, when, on July 9, the Department of Health and Human Services (HHS) announced a list of 89 new ACOs whose leaders have brought their organizations into the Medicare shared savings program. They join 32 ACOs participating in the Pioneer ACO Model being sponsored by the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services (CMS). Altogether, that makes for 154 ACOs as of this month, for those who are counting.

Here’s the surprise: nearly half of the new ACOs are physician-governed organizations that serve fewer than 10,000 Medicare beneficiaries. And only a relatively small minority are large integrated delivery systems that are nationally known (in contrast to the list of Pioneer ACO organizations). Instead, a perusal of the list of new ACOs reveals such organizations as Golden Life Healthcare LLC, a Sacramento, California network with 57 physicians; HealthNet LLC, in Boynton Beach, Florida, with 55 physicians; and Owensboro ACO, in Owensboro, Kentucky, with just 26 physicians.

Granted, several of the new ACOs are comprised of larger, broader, and in some cases, better-known, networks. For example, Advocate Health Partners, based in the Chicago suburb of Rolling Meadows, Illinois, involves 2,237 physicians affiliated with one of the largest integrated health systems in the Chicago metro area. Similarly, Mount Sinai Care, LLC, in New York City, involves an integrated health system with 2,249 affiliated physicians.

But the theory that only the very largest, and fundamentally market-dominant, integrated delivery systems would be daring enough to participate in Medicare’s voluntary shared savings program, has turned out to be just plain wrong. What’s interesting here is the diversity of types and sizes of organizations involved, and even more than that, the diversity of healthcare markets involved, from the nation’s largest metropolitan areas, including New York City, Los Angeles, Chicago, and Houston, to mid-sized markets like St. Louis, Milwaukee, and Louisville, to quite small communities like Coos Bay, Oregon and Mishawaka, Indiana.

What’s more, the healthcare markets involved also range from relatively advanced ones like Boston and Cincinnati, to markets that no one would call advanced, including Wichita Falls, Texas and Baton Rouge, Louisiana.

In short, this roster of new ACO organizations represents a cross-section of today’s healthcare industry, with a mosaic of provider groups venturing forward to embrace the challenges and opportunities of accountable care under Medicare (and of course, that’s not even to mention the dozens of provider organizations already partnering with private health plans on private versions of the Medicare ACO models).

So what does all this say? For one thing, it says that there are a lot more courageous provider leaders out there than most of the self-appointed healthcare experts anticipated! Indeed, when the proposed rule for the Medicare Shared Savings Program was first revealed a year after the passage of the Affordable Care Act, some would-be eminences grises in healthcare clucked openly in derision, averring that the ACA’s ACO provisions were simply too challenging in order to lure any significant number of provider organizations to join the program. But those know-it-alls have been proven wrong.

Will there be challenges? Absolutely. No one doubts that there will be significant strategic, financial, operational, information technology, physician-relations, and other hurdles moving forward. And it’s very possible that some of these 89 newly minted Medicare ACOs will collectively stumble and fall, and a small number—perhaps even more than that—may end up failing completely.

But what’s clear to me is that the leaders of these newborn ACOs understand one very important fact: that accountable care, in its broadest sense, is the direction in which U.S. healthcare is inevitably headed. And the leaders of these 154 collaboratives are collectively skating to where the puck is headed, as they say in the hockey world. And as ACOs—both of the two formal Medicare varieties, and more broadly defined, in the private payer sphere—grow and evolve forward, healthcare IT leaders will absolutely be key change agents and guides to future processes in their organizations. It’s going to be an exciting, bracing time in healthcare. Just don’t trust the self-appointed experts to tell you exactly how it’ll all turn out.




Great article and analysis of the ever changing ACO world. What an interesting look at the organizations that are part of the first ACO's. I agree that they're very smart organizations to have gotten involved early. That will pay off very well for them.


Great article. I am an analyst working for a health system that is one of the 89 just accepted into the MSSP and we are very excited about this new adventure! We know we have a lot of work ahead of us, but we are not alone.

Most of the healthcare outcomes have been a surprise to everyone.

Although I was unsure at all times of the outcome of the SCOTUS decision regarding the ACA, (I would never place a bet on anything that has human emotions involved in it), I would also read and hear from "experts" what was surely going to unfold. And just as you indicate, they were all wrong.

Accountable Care Organizations (ACOs) are definitely a trend in the US. Most providers that I have worked with are actively pursuing to become one. Even though many don't have a total grasp of what exactly it is.

It's a big surprise of the variety of participating organizations in this new round. I would never have thought that a small practice of 50 physicians or less would consider being an ACO. Most physicians I have spoken to lately were largely unaware of what an ACO was.

What I'm not sure of if these organizations have realized that they will have to invest in healthcare information technology in order to be a successful ACO.

It's not easy managing an ACO without the proper infrastructure, processes and workflows that can only be provided by technology. Business Intelligence (BI) will be critical to them and so will reporting and paralytics.

BI will be necessary for Population Health Management (PHM) and Chronic Disease Management (CDM).

Those that will stumble and fall will be precisely those that don't have a strategic approach with IT.

Michael Planchart