• Provider groups heart the ACO regs

    About today’s issue of the final ACO rule, Sarah Kliff reports,

    Today’s regulation does a lot to both increase the financial incentives and decreases the risks, of participating in the program. The American Medical Association likes it, as does the American Hospital Association.

    But the most important endorsement so far comes from the American Medical Group Association, which represents more than 400 large provider organizations–the exact kind that the Obama administration hopes will participate in the program.

    The AMGA had blasted the earlier, proposed rule. On the one hand, changes made in the today’s final rule that sweeten the pot and make providers feel better suggests that ACOs will save a lot less money than they might have otherwise. On the other hand, it’s a voluntary program, and the only way to get providers to participate is to do just that. It’s health reform’s catch-22.

    The question is, once ACOs are in place (if and when that occurs), can the structure be used to gradually squeeze inefficiencies from the system. That’s the hope. That’s the goal. That’s the only way provider payment reform can work, politically, if at all.

    I often put it this way, you have to start with sensible structures that have no teeth. Then you have to add small teeth, baby teeth. Later you add some bigger teeth, maybe some canines. Finally, years from now, the fangs come out. But, they are only fangs relative to the health system of today. By the time we see the fangs, we’re ready for them. The transition is gradual. Everybody is on board.

    Sound too optimistic? Guess what. It’s all we’ve got. To make eventual losers feel like winners, you’ve got to go slow. To do otherwise spells immediate political failure. Provider organizations have power and that cannot be easily ignored.

    A helpful comparison between the proposed and final rule is here. The full 694 pages of regs are here. The Department of Justice/Federal Trade Commission final statement of antitrust policy for ACOs is here.

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