ACOs, Unlikely Homes for Medical Homes - Part 3 of 3

Continued … see part 1 of this discussion, published Monday, August 20

OK, so you’re a skeptic and the numbers from last day look just too good to be true. Let’s take a more conservative view. While the above scenarios are supported by actual clinical tests and situations, let’s suppose they are best-case scenarios and therefore extreme. If the savings were only 15% of the above, the medical home provider could still see over $100,000. Let’s say then that the medical home decides to keep 50% of the shared savings and divide the other 50% among the other team members. This means adding only $50,000 to the income of the primary care physician. Current average PCP income = $135,000. Add $75,000 net for care coordination. Add $50,000 from shared savings. $260,000.  We now have a program that, even when viewed from the most conservative vantage point, is structured to bring the income of the primary care physician from $135,000 to $260,000. In essence, the program is designed to double the income of primary care physicians who decide to participate in medical home style delivery and reimbursement systems.  

We can start to understand now why payers are willing to work together to fund the coordination of care through pilot programs like the Comprehensive Primary Care Initiative (CPCI). We can also see why 200 primary care physicians attended the first organizational meeting of the CPCI in one small city in Ohio.  And we can also understand why ACOs would not embrace this process or why, in fact, they would put as many barriers as possible in place to prevent such a system from being implemented. As we have stated already, the regulations by which ACOs can be established are so complex that almost all ACOs are large health systems. These health systems primarily generate their income from specialty care while the savings are being generated through primary care, coordinated care and the medical home.  

It is clear to see that the maximum cost savings, and the biggest boost to improving quality of care is going to work when the medical home is a separate business entity from the health system.  Predictably, we would not expect to see ACOs embrace the medical home.  On the other hand, we would expect to see – and are seeing, in fact – huge popularity of the CPCI among independent primary care physicians. ACOs are resisting expansion of the medical home even publishing negative studies to resist the concept from being established as part of the new delivery system.  

Jim Grue, O.D.

Alistair Jackson, M.Ed.