Guest Post: Accountable Care as a Panacea

Monday, April 22nd, 2013
This post was written by Ally C. Evans

ACO

ACOs are testing ways to disrupt the high-cost culture of healthcare.

In the final post of a three-part series on “Accountable Care: The Power of Partnerships,” guest blogger Ally C. Evans, healthcare consultant with Freed Associates, makes the case for ACOs as a solution.

Because ACOs are in a state of evolutionary fluidity, it is too early to know if they will cure our fragmented delivery system woes, but they certainly have potential. We know this because although the term ‘ACO’ is relatively new, the concept itself is not. The likes of Kaiser Permanente, the Mayo Clinic and the Cleveland Clinic have operated under the principles of integration, population health management and accountability for a long time. In fact, they are so good at it that they’re really more like Super ACOs. They have developed highly sophisticated, centralized practices, IT systems and care networks that connect patients to the right services at the right time to optimize outcomes, the patient experience and service utilization. As a result, they have emerged as some of the top healthcare brands in the country and provide best-practice examples to inform ACO strategy and tactical implementation.

The major benefits of ACOs are clear. Healthcare spending reductions will be driven by attempts to disrupt the high-cost culture associated with volume-based payment. Healthcare quality enhancements will leverage both preventive and reactive tactics to drive performance relative to quality benchmarks. Specifically, enhanced service integration and care coordination will ensure effective management of chronic conditions in low-cost primary care settings, minimizing demand for high-cost acute and ancillary services. If shared savings appropriately offset the revenue loss providers may experience due to efficient service utilization, more patients will receive the appropriate standard of care at a lower price. Although this concept doesn’t seem like rocket science, given the history and complexity in healthcare it’s nothing short of groundbreaking.

Of course, ACOs aren’t necessarily the right choice for every provider. There are inherent risks that will keep the ACO debate whirling around board rooms for some time, not the least of which are the risks associated with change burn-out, inequitable care (i.e. patients within an ACO get a higher standard of care than non-ACO patients), misalignment with organization strategy, revenue reduction, financial penalties tied to low performance, and up-front infrastructure investment. CMS is addressing the latter concern with their Advanced Payment ACO, which provides a proportion of projected shared savings up front for start-up costs.

A small but rapidly growing proportion of healthcare organizations have taken the ACO plunge, with a reported 221 operating across 45 states as of May 2012. These ACO early adopters have varying structures, with more than half being sponsored by hospital systems and just over one-third sponsored by physician groups.1 Specific to the Medicare ACO programs, 116 ACOs had joined the Shared Savings Program as of July 2012 with another cohort joining in January, 2013. An additional 32 ACOs are participating in the CMS Pioneer ACO Program, designed for more experienced and integrated organizations, and 20 are participating in the Advanced Payment ACO. The greater majority of CMS ACOs are physician-led.

If ACOs are successful on a large scale in this country, they will fundamentally alter our health system, underscoring the notion that high-quality care and responsible spending are the right thing to do. As a patient-centered approach, these programs have cost benefits that will eventually filter back to employers and patients, with reductions in health-insurance premiums and subsequent reductions in cost-driven avoidance of care and medication non-compliance.

Are ACOs the answer we’ve been waiting for, or another flavor of the month program waiting to fail? Based on the ethical, economic, and clinical potential, we think it is a significant step in the right direction.

References:

  1. Muhletein, D., et al. Growth and disperson of accountable care organizations: June 2012 update. Leavitt Partners, June 2012. Available online.

Read Part 1: Why Accountable Care Organizations?

Read Part 2: Accountable Care Reflects Paradigm Shift from Volume to Value.

Ally C. Evans is an industrial engineer specializing in process and system improvement in healthcare. Most recently, Ally has driven various initiatives in the Accountable Care arena, focusing on the design and implementation of ACO strategy and tactical interventions. She is a consultant with Freed Associates, a California-based healthcare consulting firm. Their work is to provide sustainable solutions that enable healthcare organization to improve patient care services reduce costs and increase operational efficiency.

HIN Disclaimer: The opinions, representations and statements made within this guest article are those of the author and not of the Healthcare Intelligence Network as a whole. Any copyright remains with the author and any liability with regard to infringement of intellectual property rights remain with them. The company accepts no liability for any errors, omissions or representations.

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