The impending shift from a fee-for-service (FFS) model to an accountable care organization (ACO) model will mean big changes for hospitalists. Edward Murphy, MD, chairman of Sound Physicians, told hospitalist attendees at the Third National Accountable Care Organization Congress that they should prepare for the shift now. 
Signs are pointing to the demise of the FFS model. The Centers for Medicare & Medicaid Services (CMS) has approved 167 ACOs, and according to an Oliver Wyman study, nearly 10% of all patients are treated in an ACO. Furthermore, some healthcare experts predict the ACO payment model may move out of the demonstration phase and become mandatory sooner than originally expected. The mounting federal debt and the looming fiscal cliff may force legislators to find innovative ways to reign in healthcare costs. That has led some to conclude that the cost-savings associated with the ACO model could help reduce the deficit. Where hospitalists fit Successful ACOs will be able to provide quality, efficient, cost-effective care to a patient population. Under the ACO model healthcare organization receive a bundled payment for an entire episode of care. If the organization can treat the patient at a cost that is lower than the bundled payment, it is allowed to share in the savings. This may act to shift focus away from specialists, who under the FFS model were significant revenue generators for the hospital. Under that model, the more procedures a specialist performed the more money the hospital could bill. Instead, the ACO model discourages expensive, unnecessary procedures, which will raise the total cost to treat the patient and thus cut into any potential savings. The focus on prevention is good news for primary care physicians, who specialize in preventive medicine. The focus on efficiency and quality is good for hospitalists, who are responsible for treating patients in a timely manner and coordinating discharges. Hospitalists also play a large role in ensuring the hospital performs well on a quality metrics, including 30-day readmissions, hospital acquired conditions, and patient satisfaction. In response to bundled payments, many hospitals are beginning a process of consolidation and integration. Organizations are merging with other health centers, acquiring physician groups, and expanding new service lines so they can influence the entire episode of care. Healthcare organizations are also realizing the value in partnering with physicians and seeking their input in order to be successful in the ACO model. During a webinar for the Society of Hospital Medicine, Ron Greeno, MD, FCCP, MHM, Chief Medical Officer of Cogent HMG, said the winners in the ACO model will be hospitals who create innovative and enduring partnerships with physicians. Specifically, relationships that have the following characteristics will perform best:
Signs are pointing to the demise of the FFS model. The Centers for Medicare & Medicaid Services (CMS) has approved 167 ACOs, and according to an Oliver Wyman study, nearly 10% of all patients are treated in an ACO. Furthermore, some healthcare experts predict the ACO payment model may move out of the demonstration phase and become mandatory sooner than originally expected. The mounting federal debt and the looming fiscal cliff may force legislators to find innovative ways to reign in healthcare costs. That has led some to conclude that the cost-savings associated with the ACO model could help reduce the deficit. Where hospitalists fit Successful ACOs will be able to provide quality, efficient, cost-effective care to a patient population. Under the ACO model healthcare organization receive a bundled payment for an entire episode of care. If the organization can treat the patient at a cost that is lower than the bundled payment, it is allowed to share in the savings. This may act to shift focus away from specialists, who under the FFS model were significant revenue generators for the hospital. Under that model, the more procedures a specialist performed the more money the hospital could bill. Instead, the ACO model discourages expensive, unnecessary procedures, which will raise the total cost to treat the patient and thus cut into any potential savings. The focus on prevention is good news for primary care physicians, who specialize in preventive medicine. The focus on efficiency and quality is good for hospitalists, who are responsible for treating patients in a timely manner and coordinating discharges. Hospitalists also play a large role in ensuring the hospital performs well on a quality metrics, including 30-day readmissions, hospital acquired conditions, and patient satisfaction. In response to bundled payments, many hospitals are beginning a process of consolidation and integration. Organizations are merging with other health centers, acquiring physician groups, and expanding new service lines so they can influence the entire episode of care. Healthcare organizations are also realizing the value in partnering with physicians and seeking their input in order to be successful in the ACO model. During a webinar for the Society of Hospital Medicine, Ron Greeno, MD, FCCP, MHM, Chief Medical Officer of Cogent HMG, said the winners in the ACO model will be hospitals who create innovative and enduring partnerships with physicians. Specifically, relationships that have the following characteristics will perform best:
- Team-based
- Data-driven
- Long-term partnerships with enduring governance
- Organization centric not practice centric
- Possess shared goals, incentives, and risks
Regardless of how the hospital-physician relationship evolves in the future, it seems clear that hospitals cannot hope to be successful in the ACO world without quality hospitalists on their team. The shift away from the FFS model will increase demand for quality hospitalist providers.
