Hospital Acquisition of Physician Groups: On the Road to Value-Based or Higher-Priced Care?

An important goal of the Affordable Care Act is to transform the US health care system from one characterized by high costs, poor quality, and fragmented care to one focused on comprehensive, coordinated, and efficient care. The Centers for Medicare & Medicaid Services (CMS) is working to meet this goal primarily through efforts to strengthen primary care and to introduce innovative new payment and delivery models. These new models are designed to reduce clinicians’ reliance on fee-for-service reimbursement, instead rewarding value over volume. For example, with bundled payment, clinicians are rewarded for lowering the cost of an episode of care, and with accountable care organizations (ACOs), clinicians are rewarded for lowering costs for a population of patients, contingent on meeting quality of care metrics. Conversely, clinicians are (or will be in the future) financially penalized for increasing costs.