Becker's Hospital Review

Clinical Integration & ACOs 25 "Organizers of ACOs are forging collaborations among entire markets of physicians and hospitals, entities that would otherwise compete with each other," he wrote in his testimony. "In fact, providers' main purpose in forming ACOs may not be to achieve cost savings to be shared with Medicare but to strengthen their market power over purchasers in the private sector." Subsequently, Dr. Richman advised antitrust policymakers to carefully scrutinize the formation of ACOs. The ACO perspective: Monopolistic behavior won't be a problem In response to the warnings of Dr. Richman and others who feel ACOs could lead to hospital and health system monopolies, Dr. Schatzlein and other executives running ACOs say they aren't engaging in the coordinated care efforts to gain more market share. "Healthcare is highly fragmented," he says. "That's one of the reasons why costs have been so high. ACOs require building partnerships in establishing high value delivery systems where care quality is not merely measured but is factored in provider reimbursement." According to Mr. Jain, ushering in the volume-to-value transformation is a watershed event and bodes well for the healthcare marketplace. "Monopolies often feed on volume and rarely on value," he continued. "Far from taking over a marketplace, driving out competitors and driving up "ACOs, most often, take independent players that create a check and balance system. You get the benefits of people working together without that consolidation." "You're going to get providers working together, but I don't think you're going to see monopolistic behavior," MissionPoint CEO Jason Dinger says of ACOs in general. "ACOs, most often, take independent players that create a check and balance system. You get the benefits of people working together without that consolidation." David Shulkin, MD, president of both Morristown (N.J.) Medical Center and Morristown-based Atlantic ACO, says he doesn't think Atlantic — which was formed in 2011 — will have any impact on the hospital's market share. "The ACO is not a strategy to drive market share," he says. "The ACO is a strategy to improve the delivery of healthcare." Dr. Shulkin says his ACO couldn't drive up prices because it doesn't negotiate rates with payers. "The individual participants negotiate the rates," he says. "If you had an ACO that was aggregating doctors and hospitals and then negotiating the price of the contract, maybe they're concerned about them getting so large that they have an unfair ability to demand rates, but that's certainly not how we're doing this in New Jersey." Others acknowledge increased market share could become an issue but have taken steps to avoid it. Horizon Blue Cross Blue Shield of New Jersey has collaborated with various types of providers including hospitals and physicians as a preventive measure against monopolization, says Joseph O'Hara, the health insurer's director of ACO models. "We're doing a medical home program with primary care physicians, and we're doing ACO programs with both physicians as well as hospitals," he says. "We want a marketplace that continues to have diversity of business partners. We think it's that kind of activity which will limit the ability of any player to gain too much power in the marketplace." Some such as Nalin Jain — delivery director of advisory services for CTG Health Solutions' provider services division — say the hype about declining competition in the healthcare industry has been overly emphasized. Mr. Jain says that despite warnings of monopolies driving up prices, healthcare spending growth has slowed in recent years due to a combination of the economy and reform efforts. National healthcare spending grew only 3.9 percent in 2012 and will likely see a similarly slow growth rate in 2013, according to CMS. However, that rate is expected to accelerate to 6.2 percent in 2014 as 11 million currently uninsured Americans gain coverage through Medicaid or the health insurance exchanges. Mr. Jain predicts ACOs will drive spending down through integration and care coordination. prices, ACOs have the potential to boost creation of dominant centers of care excellence across the country delivering higher quality outcomes per dollar spent." Market share impact: The FTC offers a safe harbor ACOs have caused concern from the beginning because they integrate operations and finances, says Angelo Russo, JD, partner with McGuireWoods in Chicago. However, he says it's "way too early" to tell what kind of an impact they will have on hospital and health system market share. In terms of antitrust enforcement, the Federal Trade Commission has established a "safety zone" for ACOs in the Medicare Shared Savings Program, encompassing those who have a combined share of 30 percent or less in their primary service area. Those within the safety zone won't face antitrust challenges except under extraordinary circumstances, according to a 2011 FTC notice. The FTC has also specified behavior ACOs should avoid, such as improper sharing of competitively sensitive information and preventing or discouraging private payers from directing or incentivizing patients to choose certain providers. Mr. Russo said federal regulators will likely take recommendations concerning ACOs from experts such as Dr. Richman under advisement. "It's an evolving process right now," he says of ACO antitrust scrutiny. "We're just in the infancy stages of it." Conclusion Overall, the effect ACOs will have on hospital and health system market share is still up in the air. Still, it seems that ACO leaders such as Dr. Schatzlein of Saint Thomas Health and MissionPoint Health Partners don't foresee issues with monopolization. "This town is full of healthcare entrepreneurs," he says of Nashville. "I probably know half a dozen people who are getting ready to jump in, and there's plenty of venture capital to back them. And these people aren't planning on just playing in Nashville. They're planning on playing nationwide." n

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