Saturday, February 19, 2011

Why Accountable Care Organizations May Not Work in Academic Medical Centers

For every complex problem there is an answer that is clear, simple, and wrong.

H.L. Mencken, 1880-1956

The ACO concept is predicated on the primacy of primary care, with doctors, nurse practitioners, nurses, and other health care providers working together to supply the most efficient, successful, and economical care for their patients. The concept presumes that the professionals and hospitals (in ACOs that include both) will work together closely — ideally, as single governing units. The electronic medical record, integrating inpatient and outpatient information, and other relevant uses of information technology are seen as basic tools in this work. ACOs will share with the federal government any financial savings the organizations produce.

John A. Kastor, MD, Chair of Medicine, University of Maryland Medical Center, 2011

Every once in a while, an idea pops up in the fantasy world of health policy reform that is so clear, so simple, so compelling, so mesmerizing, and so appealing that it is too good to be true.

Such is the case with accountable care organizations (ACOs) and academic medical centers (AMCs).

The ACO concept is clear and simple.

If one can get specialists, primary care practitioners, and hospital executives in academic medical centers (AMCs) to collaborate and to broaden the primary care base, care can be purposefully coordinated, duplication virtually eliminated, patients treated holistically, money saved, and great savings shared by all parties. Most importantly, great savings will accrue especially to a great third party, Medicare, which provides the bulk of care and revenues to academic institutions. In theory,everybody wins, nobody loses.

So much for a simple answer to bringing down Medicare costs. Now a reality check. In the February 17 New England Journal of Medicine, in two e-editorials (editorials available online but not on paper), three academics conclude ACOs won’t work in the academic setting.

Why not?

- John A. Kastor, MD, academic division chief of cardiology and chair of the department of medicine at the University of Maryland Medical Center, says,

“Establishing successful ACOs at academic medical centers will require changing several aspects of the traditional culture at medical schools. Leaders at such centers will need to convert their organizations from a hierarchical structure to one that is more horizontal and collaborative. Will they be able to do so? Given the challenges, several leaders with whom I spoke doubt that ACOs can readily be established at academic medical centers.”

- Scott Berkowitz, MD, MBA, and Edward Miller, MD, of Johns Hopkins, cite these “substantial" cultural barriers to making ACOs work in AMCs - transitioning from a specialty-dominated to a primary care dominated faculty, requiring heretofore autonomous departments to centrally organize, clinically integrate, and coordinate their activities; re-defining the roles and rewards of current faculty members, who depend on grants, publications, and scholarly reputation for advancement, rather than clinical efficiency and direct care of patients. “Ultimately, “ say the two authors,” AMCs will need to determine whether becoming an ACO can be sustainable financially, how they can overcome cultural obstacles to improve care delivery, and how they can best continue to excel at fulfilling all aspects of their mission.”

As I read these academics on difficulties of imposing the ACO model on AMCs, and as I thought of the policy makers’ solution to reining in health costs, namely, horizontal integration with everyone playing on a level clinical ground, an image from my past reading came to mind (Edward de Bono, The Use of Lateral Thinking, Jonathan Cape, London, 1967), namely, vertical holes on level landscapes

Edward de Bono, MD, (1933 - ), a physician, author, inventor, consultant, and world class authority on thinking, has observed the medical landscape may appear to be level, but if you examine it closely, you will find a series of deep vertical holes. At bottom of each hole resides a world class expert.

Sadly, these vertical holes do not interconnect. Policy makers dream of horizontally connecting the holes with a magic triad: one, a broad base of primary care physicians, two, an elaborate interoperable electronic communication system, and three, financial sharing by all.

Unfortunately, de Bono says you cannot dig a hole in a different place by digging the same hole deeper. You have to change perceptions and the structure first. Otherwise you will fail. The lesson? You cannot drive a square peg into a round hole without first rounding off corners of the peg. Even then, you're unlikely to reach the bottom of the hole.


1. J.A. Kastor, “ACOs at Academic Health Centers, “ ell, February 17, New England Journal of Medicine, available at

2. S.A. Berkowitz and E.D. Miller, “Accountable Care at Academic Medical Centers – Lessons from Johns Hopkins, February 17, New England Journal of Medicine, available at

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