Everything Old Is New Again

A couple of decades ago, I was deeply involved in the formation and management of Physician Hospital Organizations (PHO's). At the time, we just knew payers were going to start encouraging providers to come together and accept capitated risk. We flew around the country to see how early adopters were managing these things called capitated contracts. Hours were spent with consultants, attorneys, physicians, and hospital administrators in setting up legal, management, and IT systems to make it all work. Tentatively, some of us put our toe in the water and signed risk contracts. The lucky ones broke even. The really lucky ones waited for the right opportunities to come along, but, fortunately, they never did. Over time, capitation contracts with PHO's fell out of favor in most parts of the country as tightly managed HMO's gave way to ever deeper discounted contracts with insurers seeking non-exclusive, broad networks of providers.

As we now look at where healthcare reform is taking us, what seemed inevitable 15-20 years ago is finally coming back with a vengeance. Integrated provider groups will soon be called upon to share risk and split the pie. Before we start reinventing the wheel, we need to take a lookback at what was learned so long ago. First and foremost is doctors and hospitals must be willing and able to share clinical data and actively manage care. Back then the systems weren't in place (who had EHR's?) and neither was the will. There was huge mistrust coloring all discussions of money and power back then. What is the fairest way to share the dollars and how can these discussions even begin to take place in an environment that doesn't start out hostile and end up worse?

The accelerated movement of specialists employment by hospitals, though lamentable for many reasons, gives us hope that this time around will be different. Economic interests are much better aligned now than they were then. But, the conversations are going to be difficult and the systems complex. Let's don't wait to get started.