“Our competition is inertia,” says Oak Street Health Chief Medical Officer Griffin Myers. “We would welcome more people to get into the space.” Myers adds that “it’s not that scary” and encourages people to look at the Oak Street model as an opportunity. Primary care–led accountable care organizations are the ACO models that have performed the best, which should give people confidence. “Downside risk is downside risk. It’s not your life,” he adds. “If you do all the stuff that we know is right — create access to primary care, medications, and behavioral health services — you’ll go a long way to taking that downside risk off.”

For far too long we’ve looked at value and prestige as being in a big hospital, but “folks in the community taking care of people in their neighborhoods is something equally valuable and deserves equal prestige,” says Myers.

Harvard health policy expert and internist Michael McWilliams views the role of primary care–led, ACO-like practices a bit differently. Evidence shows these practices and independent physician group models generate more savings in these models because “primary care works.” It’s the primary care practices that have the greatest incentive to reduce use of just about any service, particularly hospitalizations. Voided costs are much greater than for hospitals, and the incentives are much stronger for these groups.

“It may be that what we’re seeing in terms of savings is really driven more by utilization management, which is masquerading as care coordination, those practices reducing use of post-acute care and SNFs [skilled nursing facilities] and decreasing admission rates in a much more utilization management–type fashion,” says McWilliams. “If you look at where the savings are, it’s where you would think that you could pull some crude levers to shift patients away from pricey hospital outpatient departments, or reduce admission rates, or reduce admission rates to SNFs, in particular.”

“Perhaps what Griffin has to do to convince you of his model is he can call it waste reduction,” says Harvard Health Care Initiative Chair Robert Huckman, “and the waste is the hospitalizations that he’s avoiding by engaging in this activity.”

Myers agrees with McWilliams, however. “What you must believe is that you’re preventing hospitalizations that were needed,” he says. “That being said, if what you are doing is managing illness so that people don’t have exacerbations and that’s the avoidance, I think that’s a very different question.”

“To be clear, the care coordination, care management programs that lower those rates may successfully lower those rates, but they’re costly,” adds McWilliams, “so then the net savings is a little less certain than the care coordinator who is in charge of making sure patients . . . can go home.”

From the NEJM Catalyst event Navigating Payment Reform for Providers, Payers, and Pharma, held at Harvard Business School, November 2, 2017.