Hospitals or Health Plans: Who Do You Trust to “Connect” You with Your Health Records?

Over the past decade, I’ve seen a number of studies asking people whom they trust among various health care stakeholders. Nurses, pharmacists, and doctors always come out at the top.  Beyond that:

  • Trust of hospitals tends to be high (60–80%)
  • Trust of health plans is at the bottom of the heap (10–20%)

Is this written in stone for the future? I don’t think so…and the dynamics for change are in motion.  Please read on.

Here’s the emerging picture I’m seeing:

  • Hospitals are dragging their feet in connecting you with your electronic health information.
  • Health plans are highly motivated to connect you with your health information.

The ACO Antitrust Police — Nothing to Do

One of the biggest concerns about ACOs has been their potential to enable market consolidation— that by uniting health care providers the ACO gains market clout and ability to charge higher prices.

While this is a legitimate concern about ACOs, so far it’s not playing out.



Will Health Plans Want to Contract with ACOs? Maybe, Maybe Not.

On the Perficient Health IT blog, Christel Kellogg writes:

I am hearing that carriers are staying away from ACOs and are not planning on partnering.  What have you heard?

This is one of those blip-on-the-radar-screen comments that jarred my attention — and it raises very important questions about industry dynamics.

First, let me expand on the issue.  As I’ve written before, there are at least two broad categories of “accountable care initiatives”:

1) Formal Accountable Care Organizations (ACOs) by which care providers contract with Medicare

2) Informal Accountable Care-Like (AC-Like) arrangements between care providers and commercial health plans.

The list of accountable care animals in the forest is likely to keep growing. For example, just this week Oregon announced details for CCOs (Coordinated Care Organizations) for Medicaid.

So how are different stakeholders likely to react to the opportunity of a formal ACO contracting with commercial health plans? Let’s look at this from a couple of different angles.

A 6th Difference Between ACOs and “AC-Like” Arrangements

Last week I wrote about five key differences between formal ACOs (mainly care providers contracting with Medicare)  and informal Accountable Care-Like (AC-Like) arrangements between care providers and commercial health plans.

  1. Transaction costs
  2. Timing
  3. Incrementalism
  4. Flexibility
  5. Capital cost

There’s an important  6th  difference worth noting:



Formal ACOs will be visible from miles away — think elephants on the Serengeti.

An ACO that wants to contract with Medicare must establish itself as a corporation. The Medicare ACO models have substantial disclosure and reporting requirements. We won’t know everything about formal ACOs, but we will know a lot. ACOs cannot hide.


AC-Like arrangements between care providers and commercial payers could be much more difficult to spot and categorize — think chameleons in the jungle.  

What’s the Difference Between ACOs and “AC-Like” Arrangements?

A lot. AC-Like arrangements will be MUCH simpler to create and maintain.

The health care market is moving toward accountable care. There are at least two broad paths forward:

1) Formal Accountable Care Organizations (ACOs) by which care providers contract with Medicare

2) Informal Accountable Care-Like (AC-Like) arrangements between care providers and commercial health plans

What are the differences between these routes? I see at least 5 factors at play:

  • Transaction costs
  • Timing
  • Incrementalism
  • Flexibility
  • Capital cost

Op Ed: Emanuel NYT Editorial is Irresponsible and Naive

Zeke Emanuel’s editorial in the New York Times — The End of Health Insurance Companies — really got my blood boiling. It’s irresponsible and naive. Former Obama advisor Emanuel “predicts”:

By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.


Provoking and demonizing health plans might have had populist appeal and political value in 2009, but in 2012 it’s an unnecessary attack on a constituency that has potential to be one of the administration’s best allies in advancing accountable care.

Prior to ACA reform legislation, health plans had the wrong economic incentives — the rules of the game were not consistent with good public policy:

  • Health plans had incentives to AVOID risk, not manage risk. They were economically incentivized to avoid high risk patients (with preexisting conditions) and to get rid of patients that became sick
  • Health plans had minimal incentives to CONTROL systemic costs — they could pass them on in the form of premium increases.

ACA changed incentives and disrupted the payer business model:

  •  Health plans will longer be allowed to avoid high risk patients; they must accept all comers
  •  Health plans must MANAGE, not avoid costs. Health plans are abandoning their old business models.

What are we seeing in the marketplace? Almost all health plans are embracing the vision of accountable care and need to shift the system from Volume to Value. Health plans could be administration’s biggest friend in revamping the health care delivery non-system.


Op-Ed: ACP Doctors, Thank You for Acknowledging a Law of the Universe

Resources are finite. They just are. This is not an opinion, it is a law of the universe.

Yet, for my lifetime, I have been incredibly frustrated by medicine’s cultural and practical lack of acknowledgement of this law.

FINALLY, the American College of Physicians (ACP) got it. Kaiser Health News describes the revelation:

The American College of Physicians hit a nerve when it released an updated ethics manual calling for doctors to provide “parsimonious care” – in other words, “to practice effective and efficient health care and to use health care resources responsibly.”

This recommendation, included in the Jan. 3 Annals of Internal Medicine special supplement, drew immediate reaction – and not just because of its use of the infrequently heard “parsimonious.” It’s been viewed as a definitive statement of medical ethics directed at the organization’s 132,000 members – physicians who practice internal medicine and its related specialties, among them cardiology and oncology, that often involve expensive procedures. And, the guidance comes at a time when health care costs are central to the national policy debate.

My personal reactions to this are very mixed.

Welcome to the Blogosphere! Voice on Population Health

The Care Continuum Alliance announces a timely new blog: Voice on Population Health.


Tracey Moorhead, President and CEO of the Care Continuum Alliance, writes today’s inaugural post. She persuasively notes the increasing importance of the full continuum of population health interventions – wellness, prevention and other approaches to improving health, reducing disease risk and raising productivity.

Bob Laszewski’s essay on today’s THCB resonated with me: 2012: A Year of Huge Uncertainty in Health Care Policy. In my 30 years in health care, I have never seen more uncertain and fluid times.

Yet in times of uncertainty and confusion, it’s important to focus on what IS certain and predictable. The need for population health approaches is one of those certainties. While care providers are recognizing the need to develop and invest in strong care management abilities, health plans are redoubling their efforts to develop these capabilities in-house.

Tracey’s first post includes a link to the CCA’s new white paper: Key Issues in Population Health Management: Key Industry Issues for 2012.  Check it out.

Leavitt ACO Report: Overstating or Understating Accountable Care Activity?

Accountable Care Organizations (ACOs) have been likened to

a unicorn — a fantastic creature that is vested with mythical powers. But no one has actually seen one.

a camel — a horse designed by a committee, one that already has its nose in the tent

With this background, you can begin to appreciate the difficulty of conducting an accurate census of ACO animals in the wilderness.  Yet, this is exactly the task undertaken in the excellent Leavitt Partners report measuring ACO activity in the US.

As I will explain, the Leavitt report has the potential both to overestimate and underestimate ACO and accountable care-like activities. In my judgment, however, it’s far more likely to be understating just how much accountable care activity actually is going on.

Findings in the Leavitt Report

The Leavitt researchers “identified ACOs from news releases, media reports, trade groups, collaborations and interviews through the beginning of September 2011. Also included were entities that either self-identified as being an ACOs or specifically adopted the tenets of accountable care.”

The report counts 164 ACOs — 99 that are primarily sponsored by hospital systems, 38 by physician groups, and 27 by insurers.

Here’s how Leavitt summarized their results: