News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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ACO model encourages clinical integration involving hospitals and office-based physicians

Here in Texas, the portion of the Obamacare Health Law that creates Accountable Care Organizations (ACOs) and an ACO payment mechanism has caught the full attention of the state’s largest multi-hospital health systems. Pathologists and clinical laboratory managers across the nation should take this activity in Texas as an early sign that ACOs are a care delivery model that must be taken seriously.

That’s because two things are happening in Texas. First, across the state, hospitals and health systems are actively developing ACOs. Second, anticipating restricted access to patients, physicians in smaller practices are starting to either sell their practices to the local hospital/health system, or are merging their group with larger medical practices.

Both activities are likely to fundamentally change the way clinical laboratories in Texas compete for the laboratory test referrals from office-based physicians. This could occur  once the ACOs now in organization initiate clinical services.

Recently, the Austin American-Statesman, tackled the subject of ACOs and described how several of Texas’ biggest health systems were taking decisive steps to organize accountable care organizations:

  • Christus Health, a multi-state healthcare system with headquarters in Irving, Texas, is actively developing ACOs in several cities across the state.
  • Baylor Health Care System, based in Dallas, has already announced that it plans to convert its 13 hospitals and 4,500 physicians to the ACO model by 2015.
  • Memorial Hermann Healthcare System, with 11 hospitals across greater Houston, is moving even faster. It expects its ACO will be ready by the January, 2012 launch date defined in the Patient Protection and Affordable Care Act (PPACA).

Large numbers of physicians in Texas are watching these developments and are taking steps to participate in ACOs. The Austin American-Statesman wrote that “There is already an exodus of solo doctors moving to large groups that are preparing to become ACOs, especially in Houston, Dallas and San Antonio.”

Even the Los Angeles Times has picked up on the ACO-organizing activity in Texas. In a story titled “Healthcare law has more doctors teaming up,” reporter Noam N. Levy wrote that “…spurred in part by the [healthcare reform] law, many independent providers across the country are racing to mold themselves into the kind of coordinated teams held up as models for improving care. … In some places, the scramble is so intense that physician groups and hospitals are putting aside rivalries and signing new partnerships almost daily.

Levy called attention to the fact that “three of San Antonio’s hospital systems are competing to form alliances with local doctors who are giving up their private fee-for-service practices in exchange for paid positions on a hospital’s team. ‘It’s kind of like the Oklahoma land rush right now,’ said Patrick Carrier, a veteran hospital administrator who heads Christus Santa Rosa, a group of Catholic hospitals in San Antonio. ‘Everyone has their wagons lined up and they’re getting ready to go.’”

At least one ACO organizer recognizes a role for medical laboratory testing. Charles Douglas Ardoin Jr, M.D., Physician-in-Chief of Houston-based Memorial Hermann Healthcare System, told the Austin American-Statesman that “improved out-patient management of chronic diseases” will be one advantage of the ACO model. That means more “appropriate” lab test orders for diabetes and other chronic diseases that require ongoing monitoring.

Dark Daily previously reported on this trend and the state of the debate over the House Bill in July 2010. “The Affordable Care Act includes incentives linked to ACOs for providers who better manage specific groups of patients. Since better patient management often means close monitoring of chronic diseases through laboratory testing, medical laboratories may see an increase in demand for such tests. Clinical laboratories [should] be ready to accommodate more lab testing that is driven by evidence-based medicine (EBM) algorithms. They should also be ready to provide more direct information to patients.”

At that time, estimates were that formation of ACOs would probably not become widespread for at least 18 months. However, just 90 days later, major national newspapers are independently reporting that major hospitals and health systems are already developing ACOs. This organizing activity certainly rebuts criticisms of the ACO concept. It also points to tighter clinical integration and clinical collaboration between hospitals and physicians.

Clinical laboratory managers and pathologists will want to stay ahead of the ACO trend. Because their parent hospital or health system will probably be part of an ACO, pathologists in community hospital settings are likely to find that ACOs improve their access to anatomic pathology case referrals from office-based physicians in the community. This may not be equally true for national anatomic pathology laboratory companies.

ACOs may also change the competitive status quo for clinical laboratory testing. Again, in cases where the parent hospital or health system is part of the ACO, it can be expected that the hospital laboratory outreach program will have an inside track for winning the lab test referrals from those office-based physicians who are also part of the same ACO.

Meanwhile, as reported by the Austin American-Statesman and the Los Angeles Times, many physicians and the state’s largest health systems are moving forward to create accountable care organizations. This organizing activity may make Texas one of the first states to have ACOs actively providing integrated clinical care.

Related Information:

New health care model: Accountable Care Organizations

Healthcare law has more doctors teaming up: A surprising rush to form medical alliances could change the quality and costs of treatment.

Come 2012, Clinical Pathology Laboratories Will Need to Support Accountable Care Organizations