Three August 2015 studies have made the Accountable Care Organizations (ACOs) and the Affordable Care Act (ACA) seem very appealing.
One study this month found that a majority of physician leaders are now in favor of ACOs and the ACA. Further compelling data favoring ACOs was presented this week. In one government cost study, financial benefits of ACOs exceeded $400 million; in another quality score increases of 10% attributed to ACOs were achieved at Montefiore Medical Center, a leading tertiary care facility in New York City.
ACOs are a network of hospitals, clinics, physicians, and providers held to quality and cost of care standards for a set patient population, and work by giving providers bonuses for meeting targets in both cost savings and quality. They were created as a direct result of the ACA, and contract with government-based or private insurers to serve large populations. In certain cases, this means doctors are rewarded for keeping patients healthy rather than earning from repeated treatment.
As contentious as the ACA has been in the media and the political arena, ACOs are showing bottom-line results on a national scale and in a particular market as well. In 2014 Montefiore Medical Center generated a 3.6 percent gross savings and increased its overall quality score over one year by 10 percent, to 86.2. The data comes from an ACO affiliated with Montefiore that treats more than 28,000 people.
A nationwide government study makes the larger effects of the ACA seem as promising as the Montefiore Medical Center study does. According to the study, ACOs: "...generated more than $411 million in total savings in 2014, which includes all ACO savings and losses. At the same time, 97 ACOs qualified for shared savings payments of more than $422 million by meeting quality standards and their savings threshold."
Successes local to New York City and across America suggest wider adoption of ACO principles is ahead, along with even further increases in need for providers to take on formal leadership roles. Because physician leaders require both business and clinical knowledge beyond the scope of a pure executive or pure physician alone, search firms with comprehensive experience across the spectrum of healthcare and support services are at an advantage due to ACOs.
There are arguments against them, however. The same recent nationwide study of ACOs also shows that savings are achieved by less than half of ACO early adopters. Nevertheless, the results from the August 2015 study show that ACOs with more experience tend to perform better over time, explaining the overall success found in the study and making the future of problematic ACOs more promising than is initially apparent.
The benefits of ACOs are winning favor with the physician leaders even as these organizations increase demand for doctors like them. A recent survey has found that a significant majority of America's physician leaders see ACOs as beneficial to healthcare from both a finance and quality perspective. Two responses in are of particular note: "69 percent of respondents agreed or strongly agreed that physicians should be held accountable for costs of care in addition to quality of care. 57 percent of respondents agreed or strongly agreed that accountable care organizations (ACOs) will be a permanent model for risk-sharing with payers in years ahead."
Many major players in national health insurance have taken note of ACOs before these studies and are acting to implement them more widely. ACOs only affect a small percentage of private healthcare plans, but their effects on private healthcare are broadening. Aetna, Anthem, Cigna, and UnitedHealth Group along with almost all Blue Cross and Blue Shield plans are all ramping up billions in funding to ACOs and other organizations based on ACO principles.
As far back as 2012, The Atlantic argued that changes from the ACA and ACOs would result in a great demand for clinicians who lead, including physician and nurse executives. This demand is affecting both physician and executive search, and leading to an incentive for firms to embrace the convergence of and synergy between recruiting both healthcare and leadership roles.
Physician leaders are rising in value. It is increasingly clear that, because of ACOs, they are increasingly important to the bottom line and quality of the healthcare system as a whole. As a consequence, demand for search firms who integrate knowledge of both physicians and executives seems to be increasing. Healthcare search firms serve a crucial role in the quality and cost driven system arising after the ACA.
To many, including noted author and journalist Steven Brill, the United States seems to have a "broken healthcare system", one that Mr. Brill describes in his landmark work America's Bitter Pill. ACOs are doing more than making this bitter pill of healthcare easier to swallow; they are making it more efficient and effective when patients need it, according to August 2015 findings. Not everything happening in healthcare is leaving a bad aftertaste.
Larry Stewart is President Tal Physicians at Tal Healthcare, a recruitment firm in Greater New York City. A leader in his field since 1982, Mr. Stewart was previously co-founder and president of Weatherby Healthcare, which became part of CompHealth, where he was president of its Permanent Placement Division.
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