ACOs Are the Latest Assault on Private Medical Practice


By Richard Amerling, M.D.

In a critique of Accountable Care Organizations (ACOs) last October I wrote: “Now comes news that three more of the original groups will jump ship, leaving only 19 of the original 32 still on board. A nearly 50 percent attrition rate should be seen as a death knell for the concept, as these were likely the best of the best, and the inducements most generous. Reasonable people would head back to the drawing board. But we are dealing with government bureaucrats, health policy wonks, and administrators. They will damn the torpedoes and push on at flank speed.”

And, as predicted, that is exactly what is happening.

Amid fanfare, the Secretary of HHS Sylvia Mathews Burwell recently announced plans to move 50 percent of Medicare spending into ACOs and other forms of “payment for value.” This initiative is being pushed through by special interests that expect to benefit. Patients and practicing physicians, the people most affected, are simply not represented.

Reporting from the Wall Street Journal suggests who will benefit from this approach:

“The secretary on Monday was flanked by top insurance industry, health system, medical association and consumer-group executives as she announced a goal that she described as historic.”

Ms. Burwell is not content with destroying only Medicare. According to Medscape, “Burwell also announced the creation of a Health Care Payment and Learning and Action Network that would work with private health insurers, providers, employers, and state Medicaid programs to hasten the spread of alternative payment models outside Medicare.”

Medscape quotes Douglas Henley, CEO of the American Academy of Family Physicians (AAFP), and Robert Wah, President of the American Medical Association (AMA): “We’re on board, and we’re committed to changing how we pay for and deliver care to achieve better health.”

The HHS plan “aligns with the [AMA’s] commitment to work toward innovative care delivery reform that will promote high-quality and efficient care for our nation’s seniors who count on Medicare, while reducing the administrative and regulatory burdens physicians face today.”

And so the leaders of “organized medicine” are on board with policies that will lead to the destruction of private medical practice, which depends completely on the much-maligned fee-for-service payment mechanism. Perhaps they don’t fully comprehend the implications of what they are endorsing. The fee-for-service private medical system has been the bedrock of American medical care.

Far from driving up costs, private medicine is the one part of the system holding down costs. The never-ending regulations and hurdles from third-party payers, both private and governmental, impose costs in a private medical office. A direct pay (non-third-party) medical practice is a model of efficiency. A patient visits the doctor and pays directly for the visit at the point of service. No bill to an insurance company is generated (though the patient may choose to submit a claim). Personnel dedicated to billing, obtaining various prior authorizations, and following up on denied claims, are eliminated.

Any incentive to churn the system to increase profits is opposed by the patient’s unwillingness to pay for services of no value, and reluctance to submit to possibly unnecessary or excessive treatments. And the physician is honor bound by a code of ethics not to harm the patient with overtreatment.

The fee-for-service system aligns payment with actually providing a service for a patient. Arguably, this is exactly what patients want, especially when they are facing serious disease. Patients expect timely care from a doctor who is representing their best interests. The ACO, like its predecessor, the HMO, provides the opposite.

HMOs, ACOs, and “bundling” share a common trait: A fixed sum is available to provide medical care to a patient. Spend less, and keep the difference as profit; spend more, and incur a loss. If you were diagnosed with kidney disease, or cancer, or heart failure, would you choose this system?

As I wrote last October, ACOs must fail because they are based on false assumptions, they are top-down and administratively top-heavy, “savings” become profit (no real savings), they rely on problematic electronic health records, and they will use so-called quality benchmarks that will end up harming individual patients.

The push for ACOs continues the assault on private medicine, which is the last refuge of high quality, individualized care. Physicians and patients must stand up in opposition.

Richard Amerling, MD (New York City) is an Associate Professor of Clinical Medicine and an academic nephrologist at Mount Sinai Beth Israel in New York. Dr. Amerling received an MD from the Catholic University of Louvain in 1981. He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania. He has written and lectured extensively on health care issues and is President of the Association of American Physicians and Surgeons. Dr. Amerling is the author of the Physicians’ Declaration of Independence and is a seasoned speaker and on-air contributor.

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