The only thing new in this world is the history that you don’t know.
Harry S. Truman
This year the consulting rm I started in 1993 will celebrate its twentieth anniversary. Over that
period, Health Capital Consultants has developed a diverse clientele, rst offering services to solo
and small group medical practices, then participating in the consolidation accompanying the man-
aged care boom of the 1990s, and, most recently, directing our focus to the economic and nancial
challenges of yet another iteration of healthcare reform. As both a healthcare consultant and small
business owner (providing employee health benets), I have witnessed the continuous transforma-
tion of the healthcare delivery landscape. In the past three years, however, I have noticed a policy
movement that, while similar in many characteristics, may portend, in scope, a heretofore unseen
paradigm shift. As I write this preface, the U.S. Supreme Court recently upheld the constitutionality
of the Patient Protection and Affordable Care Act (ACA), in two consolidated opinions: National
Federation of Independent Business v. Sebelius and Florida v. Department of Health and Human
President Obama has just been reelected to a second term, as the primary driver and
namesake for the historic healthcare form known as “Obamacare.” These two landmark events will
most certainly shape his presidency, as well as dramatically change the course of events in U.S.
However, regardless of the current level of political relevance, achieving cost and quality is not
a new pursuit. For more than 80 years, there has been an effort to improve the cost and quality
The year 1946 brought the Hill– Burton Act that offered federal funding to hospi-
tals that didn’t discriminate and that covered a reasonable volume of patients. The year 1965 saw
the advent of Medicare and Medicaid, the rst universal (though limited) coverage for vulnerable
populations. Then, in 1999, the Institute of Medicine’s seminal work, To Err is Human: Building a
Safer Health System, boosted public awareness of deciencies in care for perhaps the rst time; a
harbinger of change for transparency and disclosure within an industry that had operated behind an
opaque veil comprised of patients’ often uninformed, and most always, trustful belief in the physi-
cians and healthcare institutions on which they relied.
Today the face of healthcare reform efforts toward a more accountable system of care is sym-
bolized by, and has its foundation in, the ACA and related legislation on both federal and state
levels. The Medicare Shared Savings Program (MSSP), which promulgates Accountable Care
Organizations (ACO), is set forth on a mere four pages in the ACA.
It has created waves throughout
the entire industry and public discourse, by seeking to provide the accountability for quality and
cost that the healthcare market has sought for decades. The ACA advances the movement toward
universal coverage within a framework of existing federal, state, and private insurance models, in
contrast to moving to a single payor system. The debate across every sector of healthcare begs the
question: Given such high expectations, can ACOs deliver?
The United States attains lower global health ratings and spends nearly 50% more in per capi-
tal health expenditures than the next highest nation. At the same time, the percentage of GDP
(gross national product) spent on U.S. healthcare is nearing 18%, 5% higher than any other country.
As healthcare expenditures continue to rise, the economy has been suffering through the Great
Although technically on the road to recovery, unemployment and the prevalence of
uninsured and under-insured citizens have approached an all-time high.
Republicans and Democrats alike have agreed that the cost of healthcare is too high and quality
must improve. More importantly, the discussion of quality and costs in healthcare has moved past