ACA likely to create more large care provider groups

By Dana Beezley-Smith, Ph.D.
July 21, 2014

ACA likely to create more large care provider groupsLess than six months after passage of the Affordable Care Act (ACA), the administration’s health czar and two colleagues wrote in the Annals of Internal Medicine that “the economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups.” Embracing such change “will be rewarded in the future payment system.”

The assimilation of providers into large health systems is intended to address the latter two of the ACA’s three goals: expanding insurance coverage, improving health care quality and reducing care expenditures. While 2014 insurance enrollment did not meet expectations, two experiments in care delivery, Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs), continue apace. There are now over 620 ACOs and over 7,000 PCMH-accredited primary care practices.

At the heart of reform is the ambition to transform reimbursement from fee-for-service (FFS) to pay-for-performance (P4P). Primary care-led ACOs and PCMHs reward providers demonstrating quality outcomes, patient satisfaction and lower costs.

The ACA initiated ACO experimentation in 2012 through two Medicare initiatives: the Pioneer ACO and the Shared Savings Program (MSSP). Commercial ACOs and PCMHs are also being developed by large insurers and health systems.

While many health policy experts believe P4P must be tried, long term success of these models is unclear. Harvard Business School professor Regina Herzlinger, who for decades accurately forecast health care trends, believes ACOs “will implode, just as capitated HMOs imploded.” She thinks PCMHs will fail due to using primary care to manage complex illnesses.

Preliminary Medicare results have varied. A recent National Association of ACOs poll finds that two-thirds of MSSP executives are unlikely to renew their three-year contracts. Nine of the 32 Pioneer participants ended involvement after one year (seven transitioning to MSSP) and only 13 generated enough 2012 savings to benefit.

As reported in JAMA, a major three-year PCMH pilot didn’t produce lower costs or significantly better care. Physician Jan Gurley reviewed PCMH research and concluded that they are “expensive, onerously bureaucratic, a drain on health care resources, especially for primary care providers, and a distraction from health care delivery.”

Practice management consultant Jonathan Bush believes ACOs will have difficulty attaining financial and clinical success. Physicians, he writes, “are not interested in jumping through administrative hoops to form an ACO, only to then analyze steady streams of data on thousands of patients, to then track and submit data to satisfy dozens of quality measures, to then process and divide group bonus payments.”

Bush also shares the concern that since large systems are increasingly merging and buying physician groups, they could dominate health care, edging out independent practitioners, decreasing patient choice and increasing costs. Gurley believes large systems are also beneficiaries of PCMHs. “If cost savings ultimately materialize, they are likely to go to large health systems and not to sustaining, much less expanding, primary care.”

Patient engagement is believed vital to the success of ACOs. Yet if University of Houston Law Center professor Jessica Mantel is correct in her analysis, ACOs could ultimately prove unpopular. “If ACOs are to effectively slow down health care inflation, they can only do so if they make some compromises in the quality of care they provide patients, that is, they must ration care.”

Second-year results from the remaining 2012 Pioneers will be critical, says David Muhlestein of consulting firm Leavitt Partners. “Consistently negative, or even ambiguous, results will not only discourage potential ACOs from forming, but will lead to existing ACOs abandoning their current value-based contracts.”

“For each method, there’s a glimmer of hope,” Catalyst for Payment Reform’s Suzanne Delbanco is quoted at The Health Care Blog, “but not a substantial body of evidence.” She notes, “It would be terrible if we woke up in six years to realize that 85 percent of payments are flowing through value-oriented methods and they’re not producing the results we hoped they would.”

Psychologist involvement

Psychologists don’t necessarily have to seek employment with hospitals and other large systems to become involved in ACOs or PCMHs. Large practices may contract to receive capitated monthly reimbursements, and insurers may ask network psychologists to join their ACOs.

Practices may also attempt FFS referral relationships with ACOs/ PCMHs. However, psychologists can expect both entities to refer sparingly in efforts to save money, and some may use other disciplines for mental health and substance abuse (MHSA) services.

While ACOs are not currently mandated to provide MHSA care, the 2014 National Committee for Quality Assurance standards encourages PCMHs seeking accreditation to “support patients’ behavioral health. This includes disclosing to patients a practice’s behavioral health care capabilities and collaborating with behavioral health care providers.” The American Association of Family Physicians also recently advocated for MHSA integration into PCMHs.

Given that the models are in relative infancy, predictions of the imminent demise of FFS reimbursement, the clinical hour and independent psychology practice appear hyperbolic. Delbanco reports the industry’s goal is for P4P to comprise only 20 percent of national reimbursement by 2020.

It is also inarguable that there remains a market for private, confidential care, and that some patients will not be well-served by “curbside” treatment in ACOs and PCMHs. “Not every patient will have their behavioral health needs met exclusively with brief interventions provided within a medical setting,” writes New York psychologist Lubna Somjee. For patients with complex needs, she says, “these settings will benefit from having access to a robust base of independently practicing psychologists.”

Massachusetts psychologist Susan Giurleo, practicing in the state upon whose 2006 reform the ACA was patterned, says unpredictable insurance reimbursement is the greatest current threat to independent practice. In email correspondence, she recommends that given ever-increasing practice expenses, psychologists cultivate additional revenue streams independent of insurance reimbursement.

Dana Beezley-Smith, Ph.D., is a clinical psychologist in private practice serving children, adults and families in Green. Ohio. She may be reached at

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