• ACOs: managed care redux?

    Over at JAMA, Ezekiel Emanuel argues that ACOs are not doomed to repeat the mistakes of managed care in the 1990s. His basic argument boils down to this: we have better computers now.

    He misses 2 key points:

    1. Managing is expensive. Even with great data and computers, it costs real money to translate data into cultural change. (But I agree that not managing is even more expensive)
    2. Physician control failed before.  Emanuel highlights the conflicts between health plans and docs/patients over HDC/AMBT for breast cancer, but MANY provider sponsored organizations also tried and failed at accepting financial risk in the 1990s.  Remember MedPartners? The California PSO bankruptcies? The Medicare PSO risk rules?

    I’m still officially a skeptic. Prior TIE coverage of ACOs here.


    • My uneducated opinion is that the HMOs of the 80s failed because of churn. The vast majority of Americans get their health care from their employer and they change jobs every 5 years. Employers change health care providers periodically, so the average person is not a client of their Health Insurance provider for more than 4 years, possibly less.

      In the individual, Medicaid, and other Gov’tal market, the churn is much higher. While getting smokers to quit sooner has long term health benefits, the chances are that any insurance company investing in a quit smoking program won’t see any monetary benefit. The program will attract too many young, healthy people for whom there is a long term health benefit in quitting, but probably not one that covers the cost of the program in under 4 years.

    • Physician control failed before, but this new generation of physicians is more open to being controlled than the previous one. The number of salaried docs recently passed the number of private practice docs, correct? Today’s doctors choose the stability of employment despite the loss of administrative control. And that makes them more amenable to working in an ACO/HMO environment.