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What We Know So Far About Accountable Care Organizations

Now that several accountable care organizations (ACOs) are operating across the U.S. — some part of the initial Pioneer ACO pilot program, others (153 total as of July, serving 2.4 million beneficiaries) voluntarily qualifying for the Shared Savings Program, and still other public and private ACOs sponsored by hospital systems, independent practices and insurers — it’s time to revisit the question: what exactly is an ACO, anyway, and what have we learned about successfully deploying coordinated care so far?

While the ACO model is still evolving, it’s worth examining some of the best practices — and pain points — already emerging, especially as more health care executives embark on crafting an accountable-care road map of their own.

First Things First: Why ACOs?

At its simplest, an ACO is a network of hospitals, providers, suppliers and payers all working together to improve its service population’s health — and in doing so, reduce the cost of care too. Reimbursements are tied to outcomes, unlike the fee-for-service model, which, let’s face it, sometimes rewards volume of care vs. quality. In short, ACOs shift the financial risk for poor outcomes to the network, which in turn can share in any savings it achieves.

The Shared Savings Program (which includes Advance Payment models for physician-owned and rural providers) established by the Affordable Care Act was created to incentivize more health systems serving Medicare beneficiaries to voluntarily participate; in terms of savings for Medicare alone, the Congressional Budget Office is estimating $5.3 billion by 2019. However, patients with private insurance may also end up being in an ACO, and some ACO-like models already exist. They are led by physicians, hospitals and even insurers, like Minnesota’s HealthPartners.

What all ACOs share is financial accountability for patient outcomes — and the myriad of organizational challenges that comes with it.

The Challenges of Leading an ACO

Becker’s Hospital Review recently asked five leaders of ACOs to find out what their biggest pain points are today and, specifically, what they wish they had known before forming their own ACOs.

Their observations (often strikingly similar) provide a point of reference for other executives considering an ACO model of their own. Leaders expressed a need for:

  • Better data, including claims-level data, to project more accurate savings — and to continue balancing cost/quality going forward;
  • Face-to-face communication to articulate priorities to concerned stakeholders, especially physicians;
  • Relationships with other providers — e.g. tertiary care centers — to reduce total care costs;
  • A culture shift, not just a mindset shift.

This leads to a few important questions for executives considering forming (or participating in) ACOs. One, do you have leadership in place to communicate with a diverse set of stakeholders why and how an ACO will help them improve care and be more effective at work?  Two, are you prepared to align stakeholders to streamline the collection, sharing and analysis of data across the ACO network? And finally, which vendors will deliver the best value to your patients across the continuum of care?

Best Practices for Success

Successful ACOs are making headway in two big ways: by improving care at the primary level, and by coming up with network-wide IT solutions for tracking outcomes and analyzing costs.

InformationWeek recently identified eight ACOs successfully breaking new ground to identify some early best practices. For example, Beth Israel Deaconess Physicians Organization (BIDPO)’s Board mandated the use of certified EHRs. BIDPO practices without EHRs were offered a cloud-based EHR. Sharp Health care ACO, with seven California hospitals, deploys a combination of EHRs, decision support, data warehousing and population health management tools. And, an ACO partnership between North Texas Specialty Physicians and Texas Health Resources uses SandlotConnect, the largest Health Information Exchange (HIE) in Texas, to enable stakeholders to leverage real-time patient information. (It’s no wonder health care IT spending is predicted to triple by 2014.)

The bottom line? Data is the key to executing higher-quality primary care in the exam room — which will become the nerve center for ACOs, if the “right care at the right time” principle holds.

As a result, ACO proponents frequently cite the benefits of this approach not just for the Medicare budget, but for patients — not a minute too soon, given the rapidly aging Baby Boomer population and their high incidence of chronic health conditions.

“Coordinated care is meant to allow providers to break away from the tyranny of the 15-minute visit, instill a renewed sense of collegiality, and return to the type of medicine that patients and families want,” explains Dr. Donald M. Berwick, M.D., Baltimore’s CMS administrator. To realize, however, that future ACOs need to align leadership teams, possess a clear strategic vision, and have a willingness to invest in both the technology and the face time required to implement it.

For those of you already participating in — or considering — an ACO model, what lessons can you share with other executives? And in what innovative ways are you embracing change?

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