FTC representatives asked stakeholders at an on Oct. 5 listening session on accountable care organizations whether planning for ACOs was the cause of the current upswing in mergers and acquisitions of both hospitals and physicians practices.
The move to consolidation predated the ACO bill, said Robert Galvin, MD, CEO for Equity Healthcare at the Blackstone Group. He said the trend was already apparent in Blackstone's studies before ACOs were proposed in the healthcare reform bill, he said. Rather, Dr. Galvin said the trend was in reaction to earlier signals from CMS that it would be moving to global payments and other new payment arrangements. For both hospitals and physicians, consolidation is "a flight to security," he said.
The movement of physicians into larger organizations has been going on for the past decade, said Lawrence Casalino, MD, chief of the Division of Outcomes and Effectiveness at Weill-Cornell Medical College. It affects both primary care physicians and specialists and physicians in all stages of their careers, he said. They would like to go to large multispecialty groups, but there are not many of them, so they agree to be hired by hospitals instead.
Some payors were concerned about hospital systems consolidating their negotiating clout. The market power of dominant hospitals will create "a centrifugal force," making it more difficult to control costs, said Elizabeth Gilbertson, president of the Hotel Employees and Restaurant Employees International Union Welfare Fund.
"In some markets we pay double or triple what we think is reasonable," Ms. Gilbertson said. She was concerned that ACOs would provide "significant tailwind" in markets with dominant providers, forcing up prices for private payors.
The move to consolidation predated the ACO bill, said Robert Galvin, MD, CEO for Equity Healthcare at the Blackstone Group. He said the trend was already apparent in Blackstone's studies before ACOs were proposed in the healthcare reform bill, he said. Rather, Dr. Galvin said the trend was in reaction to earlier signals from CMS that it would be moving to global payments and other new payment arrangements. For both hospitals and physicians, consolidation is "a flight to security," he said.
The movement of physicians into larger organizations has been going on for the past decade, said Lawrence Casalino, MD, chief of the Division of Outcomes and Effectiveness at Weill-Cornell Medical College. It affects both primary care physicians and specialists and physicians in all stages of their careers, he said. They would like to go to large multispecialty groups, but there are not many of them, so they agree to be hired by hospitals instead.
Some payors were concerned about hospital systems consolidating their negotiating clout. The market power of dominant hospitals will create "a centrifugal force," making it more difficult to control costs, said Elizabeth Gilbertson, president of the Hotel Employees and Restaurant Employees International Union Welfare Fund.
"In some markets we pay double or triple what we think is reasonable," Ms. Gilbertson said. She was concerned that ACOs would provide "significant tailwind" in markets with dominant providers, forcing up prices for private payors.