ACOs are not for Sissies

This is the title of a presentation I gave to the Tampa Bay MGMA on July 12.

Many have touted ACOs as one of the most critical reforms in the Affordable Care Actbecause of its focus on realigning healthcare provider financial incentives to patient-centered and preventive care and away from procedure/volume based care.  I agree with that assessment.  Unfortunately,  the proposed regulations (which have been justifiably bashed by many in the healthcare industry) have done much to derail ACOs.

The final regulations will hopefully incorporate many of the criticisms so that the movement toward ACOs can continue.  According to two industry leaders, ACOs must be successful: 

 “The Accountable Care Organization: Whatever Its Growing Pains, The Concept Is Too Vitally Important To Fail” — Health Affairs, 30, no. 7 (2011):1250-1255

“The accountable care organization model is intended as an option both for Medicare and for non-Medicare, commercial health care services. However, the general model and the specific shared savings model proposed for Medicare have come under criticism. Much of the criticism is valid and should be addressed.  However, none should serve to prevent the evolution of this model, because the alternative to a fundamental restructuring of how health care is delivered and paid for in the United States is likely to be a type of indiscriminate cost cutting that will leave the nation with a damaged health care system, reduced access to care services, and declining quality of care.”

“ACOs and Medicare … quo vadis?” — MGMA Connexion, July 2011
“[T]he  accountable care organization (ACO) concept — with its emphasis on improved care coordination and payment based on measurable value rather than volume — holds great promise for ensuring that our healthcare system is safer and offers higher quality and more cost-effective care while increasing patient satisfaction.”
“One hopes that the new Center for Medicare and Medicaid Innovation will be a bit more adventurous (and a bit less prescriptive) in creating experiments and demonstration projects that stand a real chance of making the potential of ACOs a reality. If not, our healthcare system may be subjected to even more draconian intervention in the quest to control Medicare costs.”

So, what should healthcare leaders be doing now?
Until the final ACO regulations come out, there are limits to what can be done intelligently.   Doing nothing is one alternative, but it may not be the best alternative.  The ACO field is full of consultants, and each of them has his or her own plan on how to proceed.  All of their plans focus on what is needed to create and sustain a successful ACO (assuming that the final regulations don’t get in the way). 

If a group is interested in establishing or being part of an ACO, I believe it is worthwhile for them to engage an advisor who is experienced in health care — both from an administrative and from a clinical point of view — to help them assess their readiness for accountable care. 
One consulting group, Harpeth Consulting, has listed a set of “strategic competencies” that it views as critical for a sustainable ACO:
•Organization culture of teamwork
•Relationships with other providers
•IT infrastructure for patient population management and care coordination
•Infrastructure for monitoring, managing, and reporting on quality factors 
•Ability to manager financial risk
•Organizational structure to receive and distribute payments or savings bonuses
•Resources for patient education and support
•Ability to aggressively disseminate best practices  
•Ability to manage financial risk
•Organizational structure to receive and distribute payments or savings bonuses
•Resources for patient education and support
•Ability to aggressively disseminate best practices
Part of the assessment of a group’s readiness for accountable care will be to see how they measure up in each of these areas.
For over 20 years, there have been many failed models of health care integration – PPMs, IPAs, PHOs, Hospital employment and acquisition of physicians, etc.
ACOs represent the next wave of integration and care coordination.
Groups with foresight and guts (i.e., not sissies) can take the leap and get in front of the ACO learning/planning curves.
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