For Some ACOs, It's "No Hospitals Allowed"

Leaders of many physician-led accountable care organizations say avoiding hospital stays is critical to their success, according to a Bloomberg Businessweek report.

In the early days of ACOs, many expected hospitals or health systems to lead the models. But more than half of ACOs are led by physician practices and exclude hospitals entirely, according to the report. Jon Blum, principal deputy administrator at CMS, said quite the opposite has occurred from what many hypothesized. 

William Biggs, CEO and medical director of Amarillo (Texas) Legacy Medical ACO, says his organization sees hospitals as part of the problem ACOs are designed to solve. "Hospitals, they want to do your robotic surgeries, your heart catheterizations, your PET scans, your MRIs — all the expensive items," he said in the report.

Mr. Biggs said he's resisted offers from hospitals to buy into the ACO, as he doesn't think having a hospital "on board" would help lower costs or improve outcomes. He also said he told a hospital executive how the ACO reduced admissions by 15 percent in 12 months. The executive said, "Well, don't do it all at once," according to the report.  

Stephen Klasko, MD, now heads the Thomas Jefferson University Hospital System in Philadelphia as president and CEO. He was previously CEO of University of South Florida Health in Tampa, where he helped set up a physician-led ACO at the Villages, the largest retirement community in the country. That ACO didn't include hospitals. In the report, Dr. Klasko said he sees the tension between ACOs and hospitals, and the challenges it can pose to a large academic medical center.

"If we make people a whole lot healthier, they're not going to go to the hospital.  You're going to need 20 percent or 25 percent less hospital beds, which means 20 percent are going to close," he said in the report. "If we're successful, the hospitals are going to get killed."

More Articles on ACOs and Hospitals:

100 Accountable Care Organizations to Know
ACO Manifesto: 50 Things to Know About Accountable Care Organizations
5 Observations on ACOs

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