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The development of an Accountable Care Organization (ACO) is the subject of much discussion and some debate.  There is a certain emerging sense of urgency among healthcare leaders regarding ACO creation — no one knows for sure what the regulatory environment will be like, but they want to be an early adapter lest they lose out to a competitor. That is what I am hearing as I travel around the country visiting with current and future clients.

This reminds me of the rush — and I think that is putting it mildly — to the concept of system integration that occured in the late 1980s and early 1990s. From the acquisition of physician practices to the development of managed care products, a great many hospitals went “all in” before they understood the risks. In fact, the rush to integration was so vast and so quick that it earned the term Modern Healthcare Fad Management. That magazine published an excellent in-depth article on the importance of integration and within weeks, it seemed at the time, hospitals were inundated with all manner of consultants who claimed to be experts in a field of knowledge that heretofore barely existed in the context of hospital operations. Many took a bite of the apple and many lived to regret it — financially and in their careers. Most blamed the messenger rather than themselves or, more appropriately, their consultants, who undoubtedly would have responded that the ideas were great and the advice spot-on but it was the client who failed to execute.

Well, here we are again.

This time, however, the stakes are much higher. We all know that the world of hospital management is entering an era of uncertainty that is unmatched in last 40 years.  The same can be said for this nation, our economy and the depressingly large unfunded liabilities for Medicare and Social Security.

I found two articles that I feel might be helpful to Hospital CEOs and others who are thinking and talking about ACOs. Perspective is an important thing to have in periods of uncertainly an upheaval.

7 Aspects of ACOs From Steven Lieberman, Former Assistant Director of the White House OMB

5 Starting Points for Developing an ACO | Hospital-Physician Relationships

Here is another dose of reality:  In the end, success or failure will hinge on leadership and management talent.  As you read these articles, you should give considerable thought to your leadership team and management group.  Do you have the requisite talent to take you through these major changes.  If you do, how do you keep them engaged and committed? If you fall short, what is your strategy to reverse this deficit?

There are futurists and analysts, including those who rate hospital debt, who believe that the healthcare human capital position will move from a healthy (read: friendly) competition in many markets to a winner-take-all war for talent.

© 2010 John Gregory Self