Here's a quote from Rolling Stone magazine: "A supergroup is a very fragile thing. Rock bands are always about balancing huge egos, but when those egos are oversized from the get-go it can lead to huge problems. That's why supergroups like Blind Faith often fail to go beyond a single album, and why long-lasting ones like CSNY had drama that never seemed to end."

Hmmm … that's apropos because, turns out, super ACOs (accountable care organizations) may have some similar issues. A super ACO means multiple ACOs or CINs (clinically integrated networks) which are each comprised of multiple practices or provider organizations, and it's all under different ownership. Said another way, there are multiple levels of competitors—frenemies, if you will—trying to work together or not work together as the case may be. There's a lot of infrastructure complexity and process complexity and, frankly, inefficiency. There's trust issues. There's the problem that rule #1 of change management is to create "quick wins" so that everyone can smell potential success and realize it's possible, so momentum happens. But if doing anything is hyper-complicated, then it's really tough to have a quick win.

Today in this summer short, this is what I am chatting about with Eric Gallagher. We talk about how Ochsner evolved from a super ACO or super CIN into its current form. This summer short is a 13-minute clip that went a little far afield from the main topic of episode 405, which was the full episode with Eric Gallagher, and therefore, I cut it. But as I always do when I cut an actually pretty great section from a show for reasons of time, I have been on the edge of my seat to share it with you.

This show is actually a very nice follow-on to the one with Dan Serrano (EP410) from last week. As Eric describes Ochsner's history and its path forward, it is a case study of some of the recommendations that Dan mentioned. This summer short also really echoes some of the themes in episode 409, which was the one with Larry Bauer, and also one upcoming with Jodilyn Owen. What will work in one local market, don't count on it working elsewhere—or not work as well at a minimum. Healthcare is local. This is a lesson many investors and entrepreneurs looking for rapid scaling prototypes have learned the hard way, and listening to Eric, it's really easy to catch the why for that.

If this topic intrigues you, also listen to the show with Dr. Amy Scanlan (EP402). Also episode 349 with Lisa Trumble. And lastly, I would recommend the show with David Carmouche, MD (EP343). Dr. Carmouche was talking about Ochsner's work improving patient outcomes with a Medicare Advantage plan.

One final note/point to ponder: scale. To really get value-based contracts, you need it. You need it to afford the infrastructure, and you need it to demand a seat at the table. But yeah with that … everything in moderation, I guess, because any scale that starts to approach monopoly proportions seems to invite bad behavior. You have to get big enough to matter in the market but not so big that your big footprint squashes market dynamics, because it seems like many succumb to the siren song at that point of putting profits over patients.

You can learn more at Ochsner Health Network.

Eric Gallagher, chief executive officer for Ochsner Health Network (OHN), is responsible for directing network and population health strategy and operations, including oversight of performance management operations, population health and care management programs, value-based analytics, OHN network development and administration, strategic program management, and marketing and communications.

Prior to joining Ochsner in 2016, Eric held leadership positions in healthcare strategy and execution—including roles at Accenture, Tulane University Health System, and Vanderbilt University and Medical Center.

A New Orleans native, Eric earned a bachelor's degree in human and organizational development from Vanderbilt University and an MBA from Tulane University.

04:23 How Ochsner Health went from a super ACO to their current value-based care model.

06:09 What signs did Ochsner Health see that helped them recognize that the clinically integrated networks they were building wouldn't help them achieve the outcomes goals they were aiming for?

07:42 Why Ochsner Health's story is a classic example of change management.

08:41 What tough decision did Ochsner Health have to make that's ultimately led to much higher success rates?

10:46 "Really … it's about changing the economic model."

11:03 Why was CMS a driver of change?

13:00 What's the more sustainable business model in Ochsner Health's market?

15:09 How has Ochsner Health been ahead of the game in the healthcare market?

You can learn more at Ochsner Health Network.

Eric Gallagher of @OchsnerHealth discusses #valuebasedcare and #superACOs on our #healthcarepodcast. #healthcare #podcast

Recent past interviews:

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Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas, Chris Deacon, Dr Vivek Garg, Lauren Vela