“Our new job is to discern the best use of our limited health care resources. It’s going to require true change, and doctors have to decide if we are going to lead the change or react to it.”


to cost the plan $82.8 million in the cur- rent 2012–13 biennium. Mr. Kukla says hospital services ac- count for a large portion of the plan’s costs at 45 percent. But Mr. Spangler questions critiques


in the report that physician-owned hos- pitals (POHs) unfairly profit from or- dering unnecessary tests or procedures. Instead, the facilities have been shown to produce better health care outcomes, shorter hospital stays, and higher patient satisfaction ratings than non-POHs, typi- cally at a lower cost.


Patients first Physicians also are skeptical of the re- port’s suggestions that state restrictions on hospitals’ ability to hire physicians under the corporate practice of medicine ban could pose a barrier to the forma- tion of ACOs as a potential alternative payment model and health care delivery system that could save money, foster bet- ter care coordination, and improve care quality.


That notion overlooks certain policies He pointed to a discussion in the


report of potentially dropping health care coverage altogether and instead shifting members to a state or federally run health insurance exchange in 2014. “That’s an option. Whether we like it or not is irrelevant. But it’s an option.” The ERS board can consider some strategies without legislative approval, as well. Whatever course ERS ultimately takes, “our responsibility is to ensure we have a contract that not only provides the lowest possible cost, but also meets the needs of our members,” Mr. Kukla said, adding that it takes cooperation from all players. For example, in the past, the agency


Asa Lockhart, MD


Christopher Crow, MD


26 TEXAS MEDICINE November 2012


was willing to pay a little more for pre- scription medications for specialty care versus reducing patients’ access. The recent study suggests using high-per- formance networks that rank physicians based on cost and quality, but having explored the option in the past, ERS decided against it. On the other hand, the agency as of Jan. 1, 2011, launched three successful medical home projects, also mentioned in the study, that pay participants based on cost and quality targets. All three realized savings in their first year. ERS identified a number of cost driv- ers, including an aging workforce, over- utilization in the fee-for-service system, rising hospital and drug costs, and un- healthy lifestyles. In addition, provi- sions of the Patient Protection and Af- fordable Care Act (PPACA), such as required coverage of preventive care without cost shar- ing, are projected


Lewis E. Foxhall, MD


and exceptions — and patient protec- tions — that already exist in Texas law, Dr. Lockhart says.


Senate Bill 1661, passed in the 2011 legislative session, enacted landmark protections for the patient-physician relationship and independent medical judgment for physicians employed by hospital-run, nonprofit health care cor- porations, known as 501(a) corporations. The law also reinforced the physician board of directors’ authority over clinical matters and prohibited administrative interference in clinical decision making. In addition, Senate Bill 7 paved the way for creating health care collabora- tives among physicians and other health care professionals that also make sure doctors have an equal say in the ar- rangements’ financial and clinical affairs. Protecting physicians’ unfettered medical judgment is the key to ensuring they can remain beholden to their pa- tients’ best interests and not to hospital management, whose focus is typically on the financial picture, Dr. Lockhart says. He added that those protections are not necessarily guaranteed under the federal ACO model.


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