Could Physicians Take the Lead in Health Reform

PHYSICIANS HAVE A KEY ROLE IN REFORMING US MEDIcal care. The fundamental problem with the health care system is its high, uncontrollable cost, and that cost is largely determined by the elective decisions of physicians to use medical resources. Health policy experts increasingly suggest that controlling these physiciangenerated costs will require a change from fee-for-service to some type of global payment, and the formation of accountable care organizations (ACOs) in which integrated multispecialty groups of physicians will be able to share global payments with hospitals and other providers. In March 2010, Congress passed the Patient Protection and Affordable Care Act, which greatly extended public and private insurance coverage but did not replace fee-forservice payment or change the organization of medical practice. The act does provide support for trials of ACOs and for experiments with improving fee-for-service payments but most physicians are not organized or ready for ACOs, and Congress is unlikely to mandate the general use of global payments for government programs anytime soon. However, without waiting for new legislation, physicians could begin a transition to a major change in medical practice needed to save the imperiled US health care system. Before fee-for-service could be replaced nationally by some form of global payment and before ACOs could become a mainstream feature of US health care, there would have to be a reorganization of medical care delivery. All physicians would need to become part of medical groups that included most or all specialties. These groups could then receive global payments rather than fee-for-service reimbursement, and in collaboration with 1 or more hospitals could function as ACOs, capable of providing all services for a patient over a specified period or for a given episode of illness. That such reorganization of physicians may be starting to occur is suggested by the current experience of the American Medical Group Association (AMGA), which represents multispecialty group practices. According to the AMGA’s president and other association officials, the organization’s membership now consists of approximately 370 groups, the majority of which are owned and managed by physicians (D. W. Fisher, PhD, oral communications, October 2010). Membership is increasing at the rate of approximately 10% annually—much more rapidly than in past years. The median number of physicians in an AMGA group is 127 and the total number in all AMGA’s groups is approximately 109 000 full-time equivalents. Because many group physicians work less than full time, the total number of physicians working in AMGA groups is probably much larger, perhaps approaching 200 000. If this estimate is accurate, it would mean that nearly 25% of all practicing physicians in the United States may be practicing in multispecialty groups. Any existing multispecialty groups not currently members of the AMGA (estimated at approximately 50) would increase that estimate. The growth of multispecialty practice does not mean that physicians are on the verge of abandoning the fee-forservice model. Fee-for-service is still the predominant form of payment for the physicians in the AMGA multispecialty groups. However, most of these groups pay physicians a base salary, and there are well-known exceptions that rely solely or largely on salaries (eg, the Mayo Clinic, Geisinger, Scott and White, Kaiser Permanente, and the Cleveland Clinic). These groups also own or partner with 1 or more hospitals. Nearly half of the AMGA groups are legally organized as forprofit entities—another sign that many physicians practicing in multispecialty groups have not yet abandoned the business approach to medical care. Nevertheless, the growth of multispecialty group practices may represent a significant step toward the much-needed reform in the health care system. In addition to the growth of such physician-managed groups, the number of multispecialty physician groups owned by hospitals is also increasing. More physicians are now being recruited to salaried employment in hospitals that want to be positioned as ACOs qualified to accept global payments. However, most physicians probably would prefer to be employed by physician groups because relationships between hospital management and staff physicians are often strained. With the possible exception of teaching hospitals and certain not-for-profit community hospitals, ACOs managed by hospitals would probably have different incentives from those managed by not-for-profit physician groups. Many