Hospitals that decide to delay entry into Value-Based Care Organization (ACO) market take a great short-term risk: a competitor may develop relationships with many of the freestanding primary care physicians (PCPs) and practices. Partnerships with those individuals and groups will have great value, independent of the success of the ACO.

This is especially true for the Medicare market. If a PCP joins a competitor’s ACO, the patients who see that physician will be assigned to the competitive ACO by attribution. That does not guarantee that the competitor ACO and hospital will be successful in clinically integrating with that physician, but it does increase the competitor’s access to that physician and their chances of developing a strong working relationship. This relationship will be strengthened if CMS limits PCPs to one Medicare ACO, as expected.

For hospitals, this creates another strong incentive to have a robust primary care strategy. Whether through employment, or IT linkages, or MSO services, or any other alternative, developing enhanced relationships with these physicians will grow in value. Today, PCPs have value due to the referrals they control. Tomorrow, their value will be derived from their role in managing patient care within budgetary and quality expectations.

The process of soliciting PCPs for your ACO will not be simple. First, they know very little about the concept. Second, they may well distrust the hospital. Third, they may not be fans of government reform efforts. And on and on. YouTube fans, there is a hilarious animated video, Setting Up An Value-Based Care Organization, that highlights a conversation between a hospital executive and a PCP. It can be an ice-breaker to opening communication.

To develop a primary care plan, first talk to your medical staff and enlist their support. Next, you should consider the following steps:
1.  Define the population of PCPs in your market
2.  Work with your medical staff to identify leaders and high quality physicians
among that group
3.  With the medical staff leaders, craft an invitation to those lead PCPs to attend a
meeting or event
4.  Provide some baseline information on the concept and incentives being created
5.  Define the role of the PCP, from your perspective, in an ACO
6.  Define their role in ACO governance
7.  Ask the physician for a commitment to work with the hospital and its
physician leaders
8.  Enlist them to help you develop working relationships with other PCPs not included in the initial group

These steps are the first eight in a 10,000-step journey. But starting by solidifying your relationships with key PCPs is so crucial that it is hard to imagine any other being more important. And doing so will help you avoid the crucial mistake of omission at the beginning of your ACO development.


David W. Miller

Founder and Chairman