Mark Lutes Comments on ACOsAccountable Care News March 10, 2011
Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, D.C., office, was featured in an article on ACOs.
When asked: "What are the key health plan opportunities and risks as ACOs unfold?" Lutes stated the following:
Risks: That fear of being left out of, or disadvantaged in, an ACO type arrangement causes a wave of provider consolidation of the type we saw in the 1990s and the consolidated providers have more bargaining power in dealing with health plans. That cooperation among formerly competing providers in a shared savings context spills over into collusion in price negotiation. That the advent of ACO networks causes plans to have to spend additional money and energy in network maintenance/negotiation that end up not being justified by sufficient savings or quality improvement from the networks. That plans (or their competitors) delegate significant risk to provider networks that fail and the plans have to make up for the lost funds.
Opportunities: Quality improvements and cost savings arising out of providers who are energized to work on new care paths in Medicare and Medicaid and use of those care paths spills over into the treatment of commercial populations. That incentivized providers make progress in cost effective delivery relieving health plans of some of the utilization management burden that, under PPACA, must be paid for out of the 15% of premium which is available for all of administration and profits."