The healthcare reform law created a flurry of activity among hospitals and systems laying the groundwork to get in on Medicare's new incentive programs for accountable care organizations.
But most of the largest for-profit healthcare groups have been absent from the clamor, hardly represented in the first few waves of participants in the CMS experiments. Instead, their executives have said publicly and privately that they're waiting to see how the program evolves before investing resources in it.
While there are several factors that separate for-profit groups from not-for-profit providers, chief among them may be the laser focus on the bottom line, and quarterly earnings pressures that don't necessarily mesh with a program that asks for years of patience before savings are seen.
Wayne Smith, chairman, president and CEO of Community Health Systems, Brentwood, Tenn., caused a small stir when he said during the Nashville Healthcare Council's “Wall Street” event in February—where financial analysts offer their predictions to the industry—that ACOs are “another form of capitation,” using a term that recalls the restrictive and unpopular medical-care strategy of the 1990s. But other for-profit healthcare executives told Modern Healthcare that they agreed with that sentiment.
Still, when the CMS released its list of Pioneer ACOs in December, Detroit Medical Center, part of investor-owned Vanguard Health Systems, stood out. The hospital is participating in the Michigan Pioneer ACO—a group whose governing body includes DMC's top leadership and the dean of Wayne State University's School of Medicine and private-practice physicians.