Align or Recycle in Radiology’s New Model?

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Curtis Kauffman-PickelleIn its December 12 article¹ on the future of health care, the Wall Street Journal makes a compelling case that the current and future state of our health-care system will center on alignment of formerly conflicting interests. Giant integrated delivery systems will increasingly include physicians, health systems, and payors in some type of giant organism that will ultimately control both cost and quality while increasing access and efficiency.

Indeed, this is the ideal structure of the accountable-care organization (ACO) as envisioned by government, with incentives thrown in for outcomes management and effective utilization control—but wait: There’s more to this story, and it might reveal that the new system will not be so utopian, after all.

When one takes a deeper dive into the details of this analysis (and when veteran health-care executives are heard from in the article’s sidebar²), a somewhat more skeptical view emerges. I suspect that this latter view is one that those of us who are longtime health-care observers and commentators see as the Achilles’ heel in the general buzz about ACOs and the alignment of incentives and interests.

In one of the article’s more interesting quotes, Paul M. Wiles, CEO at Novant Health in Winston–Salem, North Carolina, says, “Today’s efforts at integration are déjà vu all over again.” The article goes on to cite Novant Health’s predecessor organization as having launched an HMO insurance product in 1986 and sold it in 2001, quoting Wiles as saying, “We found it to be a pretty significant distraction from the core business and a source of internal tension.”

The piece continues, “Perhaps the most dramatic flameout was the Allegheny Health, Education, and Research Foundation [AHERF]. Starting in the mid-1980s, it was built from a Pittsburgh hospital into a state wide system through hospital and physician-practice acquisitions.” It was a miserable failure.

In a summary of the events surrounding AHERF, Lawton Robert Burns, PhD, MBA, chair of the department of health care management at the Wharton School, says, “Nobody’s showed me we’re going to do it a whole lot better this time. . . . To expect that with one piece of legislation, everyone’s going to sit around the campfire and sing “Kumbaya,” forget about it.”²

This brings us to the notion of aligning the interests of radiology with those of the larger, integrated health organization currently known as an ACO. Do you see inevitable conflict of financial interests? Do you imagine that the somewhat entrepreneurial, private-practice ethos of the majority of radiology practices will easily align with institutional bureaucracies that result from these giant enterprises? Will the new capitation, payment bundling, or yet-to-emerge payment model be compatible with the ideal practice of radiology? Can and will radiology be empowered in this type of system?

I am sure that if the will exists to make it a success, then a way can be found. I remain skeptical, however. Think of the garden-variety radiology group, in which interventional and diagnostic radiologists constantly attempt to align and realign their interests, or those large subspecialty practices in which section heads attempt to align and calibrate their productivity patterns with those of the lesser mortals in other sections.

Yes, I know, there are some absolutely great and highly functional practices out there. I have seen them up close. Having also seen a fair number of less pristine groups, though, I can tell you that there is not much “Kumbaya” being sung in these settings, let alone those situations in which the hospital customer is at odds with its radiology contractor. It’s not exactly a partnership kind of feeling, in many of these instances. There is abundant misalignment, and more than enough mistrust to go around.

The short view is this: It is likely that the grand ACO is, in fact, a grand recycling of past models that kind of worked for a while, but didn’t really succeed at complete alignment. They really did not save any money for the payors, and they really did not greatly improve quality or outcomes.

Did they make health care easier or more user friendly for the patient? We all know that we can do better at this piece—that we must do better—and that a new generation of empowered patients will demand better. Keep your eye on how this part of the puzzle unfolds. It is likely to be the only piece that is not recycled, but is truly a push outside the comfort