The New Health Dialogue

"What should we do now?"

That’s the question we often hear from stakeholders in the health care industry. Companies, law firms, consultants, investment advisers and state governments need to know what to do, now that comprehensive federal health care reform seems imminent. One of the trickier questions, given the dearth of guidance at this time, is how physicians, hospitals and other entities that provide health care services can come together to offer a more coordinated, efficient and consumer-oriented approach to health care delivery.

We came across this helpful article by Doug Hastings, recently named Washington, DC’s Best Health Care Lawyer, that offers several ways in which providers can begin to prepare for the post-reform era. Hastings suggests that organizations look at whether they are poised to participate in an accountable care organization (ACO), their ability to coordinate care across a continuum of care (like an integrated health system might) and what changes may need to be made to their organizational and contract structure to make such coordination possible.

Both the House and Senate bills create ACOs for Medicare, and private insurers are likely to adapt and encourage this new model too. Differences between the House and Senate bills are being worked out, but basically ACOs involve a group of doctors, usually a hospital, and often other providers. They coordinate care and share the financial risk -- but would also be allowed to share some of the savings. Quality would be measured and rewarded -- this isn't about making money by skimping on care. (Our colleague Tom Emswiler has written about ACOs and related practices here, here and here.)

Also worth considering in the “what’s next” column are legal barriers that must be overcome to implement some other reform initiatives. For instance, the reform bill rewards ACOs that meet quality of care targets and reduce costs and allows previously unaffiliated physician groups, hospitals, nurse practitioners, physician assistants and post-acute entities to share the savings. Current law may prohibit or limit the ability of these unaffiliated entities to be financially aligned or share data in the way anticipated by the proposed reform bill. So we took note when late last year the Freshman Senate Democrats (the same set that put together the Freshmen Cost Containment Package that was adopted into Sen. Harry Reid’s Manager’s Amendment) asked the Federal Trade Commission, the Department of Justice and the General Accounting Office to look at precisely these questions. Specifically, the senators requested that these agencies review the state and federal laws and regulations that may prevent the very collaborations and new models for a competitive health marketplace created by health care reform. For instance, they wrote the FTC:

Physician, hospital and other provider communities across the country are eager to develop or build upon current efforts to promote care coordination and impove patient outcomes via means such as service payment arrangements and other forms of clinical integration. However many are hesitant to act due to the lack of comprehensive, broadly-applicable, and user-friendly guidance they can readily understand and utilize....

...As new ways of thinking and care delivery models develop, we also appreciate the need to monitor and challenge those cases which have the potential to encourage undue market power or price setting. Furthermore we welcome your diligence in challenging harmful concentration in the health care marketplace as it continues to evolve and modernize.

The senators made an important request. The findings will be much anticipated by physician groups and health care organizations who need to know how to proceed toward a better -- and very much changed -- health care system. We may well need to fine tune many state or federal laws and regulations so they continue to protect us (and the system) from harmful collusion, while allowing beneficial collaboration to redesign our health care delivery system so we have higher quality care at reasonable cost.