Megaclinics - The Megaclinic Solution

“We must attack the root causes of skyrocketing health costs,” Mr. Obama said, pointing to institutions like the Mayo Clinic in Minnesota and others as mong those that offer high-1uality care at low cost. “We should learn from their successes and promote the best practices , not the most expensive ones.”

Sheryl Gay Stolberg, “Obama to Forge A Greater Role in Health Care,” New York Times, June 7, 2009

As a physician who practiced in Minnesota for 25 years – home of the Mayo Clinic and a state in which group practices average 150 doctors – I’m well aware of megaclinics – more officially known as integrated multipspecialty clinics.

About 35 years ago, Dr. Paul Ellwood, launched the modern managed care movement, created the name HMO and PPO, and persuaded the Nixon administration's HMO act. Then a Minnesota resident, Ellwood later proclaimed the ideal practice delivery system would consist of 10 major megaclinics with subsidiary physician groups, a kind of a spoke and wheel organizational construct, with peripheral groups feeding tough cases into megaclinic headquarters.

Ellwood advised the Clintons who espoused the solution to health care as managed competition, which consisted of giant megaclinics across the land competing with each other.

The idea that large megaclinics, single large organizations or virtually organizations bound together by electronic health records, will solve the health care problems persists. At the heart of these organizations, preferably non-profit, would be salaried physicians, many of them primary care doctors, consulting with each other, functioning as clinical teams, and offering coordinated comprehensive care with heavy doses of preventive medicine.

According to a paper in the June 11 New England Journal of Medicine, “Achieving Health Care Reform – How Physicians Can Help,” it is a given that larger organizations are superior in every way and and less expensive than independent practices or "microsystems." Indeed, say the authors “Health care Microsystems are famously unreliable, variable in costs, and often unsafe.”

The paper goes on to say that megaclinics are more capable of achieving a “triple-aim” one, better experience of care (safe, patient-centered, timely, efficient, and equitable), two, better health for the population, and three, lower per capital costs (Berwick, DM. Nolan, DW, Whittington, J, “The Triple Aim: Care, health, and Cost, Health Affairs, 2008:27:759-60).

To achieve these lofty triple aims, the authors maintain the health system needs,

• large integrated accountable multispecialty salaried organizations;

• or failing that, large networks of virtually integrated organizations bound by common rules, protocols, and EHRs documenting and directing performance

• delivery and payment reforms, such as salaried physicians, shared savings; bundled global fees for episodes of care, phasing out of fee-for-service, making costs more uniform between high spending regions and physicians and low spending regions rewards for performance, subsidies for electronic records, administration and clinical support for care management and quality improvement, and punishment in the form of lower payments or banishment from networks of non-complying practitioners.

The New England Journal article concludes, “Physicians can become our most credible and effective leaders of progress towards a new world of coordinated, sensible, outcome-oriented care in which they and their communities will be far better off. Defending the status quo is a bankrupt plan, and physicians have an opportunity to help us all see beyond it.”

This all sounds like a wonderful idea, and the Obama administration has bought into the concept of megaclinics as solution to today’s high costs, uneven quality, and safety hazards. Peter Orzag, the budget director repeatedly says bringing high spending physicians and hospitals into line with low spending regions, could save the system 30%, and even perhaps help pay for covering the uninsured. This idea to me is poppycock and ignores socioeconomic differences and cost of living variables.

But, I fear, the idea is also policy wonk idealism at work, which is often disconnected to reality on the ground. The authors of the New England piece, are Elliot Fisher, MD, professor at the Dartmouth Medical School and director at the Dartmouth Institute for Health Policy, Donald Berwick, professor of the Department of Health Policy and Management at, Harvard School of Public Health and CEO of Institute of Healthcare Improvement, and Karen David, president of the Commonwealth Fund in New York City.

The authors neglect to mention that 80% or so of doctors practice in non-megaclinic settings, that setting up these megaclinics requires a tremendous investments in infrastructure, that the evidence that they provide lower cost care remains skimpy, that antintrust laws and Stark regulations make it difficult and expensive for doctors to form virtually integrated groups and to create bundled billing with hospitals, that independent practice associations have been around for years without noticeable impacts on costs, that these organizations are often less than enthusiastic about accepting Medicare, Medicaid, uninsured patients, that large cost variations still exist between megaclinics in various sections of the country, and the physicians culture still resists the Group Think precepts.