Are ACOs the Managed Care Déjà vu?

I recently read the article "Some Claim ACO Status Without Truly Changing," about how some provider organizations are asserting they've "always been an ACO."  This did give me a déjà vu moment.

I feel like I'm in a time warp, caught somewhere around 1990. Remember that year?  Margaret Thatcher resigned, Manuel Noreiga turned himself in, Jim Henson died, Driving Miss Daisy won best picture… And that's also about the time that executives of provider service organizations got the idea that they could be managed care organizations and manage the financial risk of health care for a population. Most often those executives told me they had "always been responsible for a fixed budget."

Now the strategic theory behind provider organizations managing health care financing is a sound one on many levels. From the organization’s perspective, controlling all of the funds for a population is one way to protect their strategic market position. From a health care policy perspective, it makes sense to have clinical professionals making the decisions about rationing health care resources.

But, if the ACOs of the future are going to succeed, executives of provider organizations need to realize that it is not business as usual. That is the reason so many managed care initiatives owned and operated by provider organizations failed. They believed there was no difference.

What I heard at the time was the oft-repeated phrase: "If only we had all the money, everything would be fine" (still, of course, a popular phases these days too). But, since the clinical professionals who run most provider organizations are trained to think on a case-by-case basis (instead of a population basis), they are not well-suited for managing population-based health funding. And at that time, executives of many provider organizations quickly learned how tough it is to make a margin managing a pool of funds.   Some of the them learned the hard way (financially speaking).

Now before you send me a message about either the evils of rationing (some entity has to do it) or my negativity about the executive management of provider organizations, I would like to point out that I think that financing of health care services based on some risk formula (capitation, case rates, etc.) is generally a good policy decision. But, to be successful, executive teams of provider organizations need to become "data-driven" in their analysis and decision making.   

I think there is nothing significantly different from ACOs of today and the managed care programs of two decades ago (though many of program architects disagree with that statement). But, without some significant change in management tools and organizational culture, management teams of provider organizations are going to be as successful (as a group) at managing ACOs in the future as they have been at running managed care programs in the past.