Thought Leader’s Corner: “Extinction” of Health Plans Because of Delivery System Re-Structuring, Especially ACOs, as appeared in Accountable Care News

Doug Hastings, Chair of the Board of Directors of Epstein Becker Green and a Member of the Health Care and Life Sciences practice in the Washington, DC, office, wrote a thought leadership piece on the "extinction" of health plans because of delivery system re-structuring, especially ACOs.

Q. The controversial piece by Ezekiel Emanuel in the New York Times predicted the "extinction" of health plans because of delivery system re-structuring, especially ACOs. Even if they aren't extinct, how will health plans look and act differently over the next five to ten years?

Doug Hastings wrote:

"I think that Dr. Emmanuel was being intentionally provocative rather than making an actual prediction. Health plans will need to evolve and change to be successful in the accountable care era, just as will providers. The years ahead will provide an opportunity for both to collaborate to achieve better clinical outcomes, patient satisfaction and cost efficiency—and a healthier population. Toward the end of the piece, Dr. Emanuel points out one step that some payers and providers may take together -- to structurally integrate. Others will integrate and better align their incentives through new contractual arrangements and joint ventures. According to recent reports, there already are over 200 pilot programs around the country taking place between provider-based ACOs and payers, both private and public.

Health plans have much to continue to bring to the table -- experience in financial risk management, sophisticated administrative systems and infrastructure to pay claims, and clinical data and systems to analyze the data for quality improvement, among others. Those functions will remain necessary and will not be fully absorbed by current provider organizations. Accountable care will cause organizations in each sector to take on attributes of the other, which is good.

The adversarial environment between payers and providers of the last couple of decades will not best serve the U.S. health care system in the future. In my view, successful payers and providers will develop innovative programs on a cooperative basis. It will take such joint efforts to align the complex, multi-faceted interests not only of payers and providers, but also purchasers, consumers and regulators. The opportunity is there. Failure to collaborate effectively will lead to efforts by outside parties, especially government, to control the pricing of both and to regulate the contracts between them."