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5 Tips for Transitioning to Accountable Care Organizations (ACOs)

By: Maggie Brandt | 10/07/2011

There's been a lot of confusion around accountable care organizations (ACO). What? You mean you didn't have a chance to read the 429-page document release in April describing all the rules surrounding ACOs?

Here's a quick synopsis:

Currently, health care operates under a fee-for-service model, in which providers are paid based on the number of services they provide. In an ACO model, payment is based on patient outcomes, as measured by several quality metrics. The Patient Protection and Affordable Care Act allows providers organized as ACOs and meet quality measures to share in the cost savings they achieve for the Medicare program. The Department of Health and Human Services believes the new ACO model will save Medicare as much as $430 million over three years.

One of Standing's health care team members, Beth Minnigerode, recently attended a panel discussion hosted by the Healthcare Businesswomen's Association (HBA), which focused entirely on ACO implementation. Representatives from Advocate Physician Partners, Mercy Care Management and Southwind discussed lessons they learned in the early stages of implementing an ACO-like model. Here are some of their insights:

1. Before adopting an ACO model, get IT infrastructure in place. IT will play a huge role in ACO implementation because each patient's full medical history will need to be available at the point of care to review before recommending treatment and to enter updated information after treatment. The system also needs to be able to track and report how well providers are meeting the quality measures, which will impact how much they are paid. Even if an ACO model isn't in the near future for your organization, making the IT investment now has great value for patient management purposes that will continue to pay off once you fully transition to an ACO model.
2. Get physicians and clinical staff on board early. Their work will be significantly impacted with the switch to an ACO. They'll be expected to be more proactive and to follow up with patients more often. Help them restructure their workflow to allow time to fulfill these quality measures.
3. Hire care managers who are entirely devoted to patient follow-up to alleviate some of the burden on the clinical staff.
4. If a hospital isn't ready to become a full-blown ACO, it can start rolling out the model with its own employees. Many hospitals are self-insured, which means they self-fund their insurance plan and assume the financial risk for providing health care benefits to employees. Implementing some components of an ACO with a self-insured group allows you to test the processes before taking on bigger steps, like negotiating with other insurance plans.
5. Start talking with commercial payers. Commercial health plans are actually moving the needle on ACOs faster than government plans. Start the conversations now, so you can build it together and ask for their help with the upfront costs to build the IT infrastructure.

Like any major change in healthcare, ACOs are going to require an investment upfront in order to prepare organizations for the switch. We're eager to see if this new model will make healthcare more efficient and affordable while also encouraging higher quality care.  

Posted in Health Care