Physician Briefing Paper Number 1

We have published our first physician briefing paper. Click the title line to connect.

Accountable Care Organizations

Accountable Care Organizations are the heart-and-soul of Obamacare quality and cost control initiatives. All is not healthy.

Ready – Fire – Aim

When the Center for Medicare and Medicare Innovation (CMMI) released the draft regulations for Medicare ACOs on March 31, 2011 the reaction was brutal. CMMI was publicly beaten like a rented mule, even by enthusiastic supporters of the ACO concept.

Criticisms included: 1) the rules are too complex 2) start-up costs will be much higher than CMMI estimates 3) the probably of achieving savings to share is small and 4) the time lines are too short

The Empire Strikes Back

In May CMMI burst forth with two new models in an attempt to quiet critics (unlikely) and to improve participation.

Advanced Payment ACO

AP-ACOs are designed to share ACO shavings before the savings are created, in effect, an advance for start-up capital. No one has told us yet what happens if the AP-ACO never generates any savings.

Pioneer Model ACOs

CMMI is hoping large physician groups already involved in the Medicare physician group practice demonstration program will start ACOs before the 1/1/2012 start-up date.

CMMI jeopardizes this initiative out of the gate by setting a ridiculous deadline. The deadline has now been extended a slightly less ridiculous deadline of August 19th.

The Pioneer Model is more flexible than the original Medicare SSP-ACO model, and has rules for both regular and “rural” ACOs, but is practically restricted to existing integrated delivery systems capable of moving very, very quickly.

Pharm Supply Chain Meltdown

The pharmacy supply chain for many critical medications is melting down, with resulting shortages.

Why? The potential list so far:

1) ultra-cheap generics are no longer profitable to produce
2) an international supply chain does not work smoothly all the time
3) consolidation in the pharmaceuticals industry
4) hyper-regulation from the FDA since 2006 has disrupted the chain with little gain in safety

The hyper-regulation problem, involving both real safety issues and of course increases in paperwork is likely the biggest problem. The biggest problems seem to be in injectables, including certain cancer and anesthesia drugs, which are being rationed if they can be found at all. Rationing and substitution seem to be the only short term solutions.