One Pediatrician’s Pre-ACO Experience

Here’s a PCC client speaking about his localized ACO/hospital experience.  I spoke with him a few times during the process and the message I think we kept coming back to is that the hospital is rarely a pediatrician’s friend.

Identifying information redacted.

By way of background, pediatricians (and most primary care physicians) in [City] exist in very small groups, anywhere from 1 to 6 physicians on average. There are a few large groups, but these are the exceptions, not the rule. This is not true in many other parts of the state, where pediatricians by and large are in huge groups, having been bought out by a hospital system or something like that. We have been able to stay small in [City] thanks in part to some of the best payment rates in the country and a fierce sense of independence. (and, for some of us, good business sense and the help of SOAPM, although that cannot be said for many).

For many months, I have been quietly speaking with other pediatricians when I saw them on rounds or in other situations, trying to raise awareness that times are changing, payment methodologies may be changing, and that, whether we like it or not, the ACA is upon is. I felt it was the right time for pediatricians to at least be discussing the best ways to survive and thrive in changing times. Most of the pediatricians I spoke with were not interested in having any sort of discussion, stating that the ACA would be overturned, they were too busy with their personal lives, or that they did medicine, not politics.

Then, we started getting letters[…]. Each of the major hospital systems here are proposing clinically integrated networks, stopping short of ACO formation, but obviously with that goal in mind. I attended the information sessions for some of these and found that there really were no benefits for a pediatrician to participate, as they lacked pediatric resources and I couldn’t see where the benefit would come for me. I was also very concerned with the thin deadlines presented to sign up, as it would seem that no decision like this should be rushed.

Our local childrens hospital has never gotten into the business of working hand in hand with private practices, unlike our neighbors in [City2], where many of the pediatric offices are now part of the [Childrens Hospital] network, essentially owned by the hospital system[…] I was approached by my physician relations rep from our Childrens Hospital to have lunch with some new administrators to discuss what they were looking to do in the community in response to the changes in the healthcare landscape. I saw this as an opportunity to be on the cutting edge of change and to at least investigate what might be out there. Through our initial meetings, they were proposing to bring a group of us from private pediatric practice together, not for the purpose of buying us, but to have a series of meetings to talk about the changes coming and look at models as to how we could thrive together and provide the best possible clinical care for kids in [City].

We discussed how they could help us become certified medical homes. We discussed how we could improve care for children with chronic disease, which has been quite fragmented in this area. All in all, there were a lot of positives.

They then asked me to lead this group, as I had the best working knowledge of the issues out there. I tentatively agreed. There would be some compensation involved due to the extra work required on my part. I received a document that would make a contract laborer for them. We had our first meeting before I could have this document reviewed. This first meeting was really just a discussion of who we were and what we were looking for.

In the room were 2 primary groups of pediatricians – (1) those who felt fairly financially stable but were concerned about where the future was headed and (2) the majority of the people in the room, who were desperate for help in the day to day operations of their practices. I invited everybody to join SOAPM and reviewed all the other resources available to everybody through the [State] Pediatric Society, the [State] Medical Association and our County Medical Society. There was a large group missing from the room, and that was most of the pediatricians in my part of town.

In addition, the mission of this group seemed a little different than that had been presented initially. Now, we were to specifically work toward forming a clinically integrated group of pediatricians. Although this had been mentioned as one of the options on the table during our preliminary discussions, it had never been a fait du accompli.

I then also met with someone from the [State Medical Association] who is an expert on issues related to new ways of networking physicians and had a lawyer review the contract labor agreement. It was clear from the agreement, that I was expected to be an advocate for the hospital, which had not been agreed upon previously.

I met with the administrators leading this project again and reviewed my reservations about being expected to advocate for the hospital and that it seemed that even though we had said we would discuss models of care, it seemed as if the hospital had already decided which model it was to adopt.

Finally, they said that I needed to review their master plan document for “population health management”. This document looked exactly like what all the other hospital systems had proposed. In thinking about shared savings plans/ACOs, they eventually would have to include the adult physicians from the university, since there is not enough potential savings to be gained from pediatricians alone. It was clear that I was being asked to figurehead a group, but that the real decisions had already been made at the board level.

Ultimately, I have decided to not take on leadership of this group, but to still participate for now. Here are the lessons I have learned:

(1) Hospitals are not your friend. Although there may be some areas where there have been successful partnerships between hospitals and physicians, if decisions are being made at the board level, they don’t necessarily have your best interests in mind. The administrators keep talking about how Childrens Hospitals are similar to pediatricians in that they get left out of a lot of decisions that general hospitals make. Not sure this comparison is valid.

(2) Our childrens hospital has never had good town/gown relationships with waves of subspecialists leaving to go out on their own. Consultants they hired to help them with this project and the administrators themselves have said that part of what they want to do with this project is too revitalize their image with local pediatricians, but I don’t feel they’ve done a great job since they were not up front about their master plans from the beginning.

(3) Large organizations are trying to effect cultural change in a very short period of time. It took years for organizations that are being held up as models (Mayo Clinic, Cleveland Clinic, [X] here in [State]) to become what they are and organizations now are trying to do this in 6 months. Artificial deadlines of “you must sign this contract in the next week or be left out” make me want to be left out.


(5) Use the services of your state medical society – they probably have somebody who is focusing on these issues and can provide you with a great education. Of course, everything I learned I really learned on SOAPM and am so thankful for the discussions here and being able to pick the brains of individuals offline.

(6) One of the scariest things coming out of these new networks that are popping up include the signing contracts with major employers. With what is happening here, if you are not in their special network, employees of those employers can still see you if you are in network for their insurance, but at higher out of pocket costs than if you were also in their special network. Eg. Someone is insured through Blue Cross through the [Hospital] Quality Network ([Hospital] is one of large local hospital systems). If you are a BCBS provider, you can see them, but you are not a member of the [Hospital] Quality Network, they will pay higher costs to see you even though you are a BCBS provider.

(7) Ultimately, I think the hospital wants to buy us out. The counsel for this group, whose husband owns a pediatric practice but for some reason has chosen to not be at the table, did a review of all the ways physicians can join together and their relative antitrust risks. As an aside, she said the least risky arrangement is to be employed by the hospital, “which might not be a bad model to look at”.

(8) The relationship between private practices and hospitals is chaging dramatically. Hospital work is such a small part of what I do, but these changes potentially make me very dependent on the hospital’s clinical and financial health, not something I’m sure I want to leap into.

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