ACO stands for “Accountable Care Organization” and like its name suggest it is an organization of all types of healthcare providers under one roof to provide more connected and collaborative quality to the patient as well as incentives for the healthcare providers for keeping the costs low. It comprises of small group of doctors, hospitals and all sort of health care providers who form a network to provide combined quality care to Medicare patients. The main must have in an ACO is a primary care physician and from there onward the pyramid of network is built. Joining an ACO is completely voluntary. According to CMS an ACO is “an organization of health care practitioners that agree to be accountable for the quality, cost and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it”.
This idea was rolled around in 2006 by Elliot fisher during a discussion of Medicare payment advisory commission. 32 pioneer ACOs were approved by Medicare in 2011 out of which 19 remained active till 2015.
The main aim of this ‘’One Stop Shop’’ is to provide quality coordinated and efficient medical care to patients. The concept of ACO is constantly evolving with special emphasis on providing care for chronically ill patients and to make sure they get to be treated in a well-coordinated manner so as to not undergo overcharges for extra test and unnecessary or duplicated investigations.
There were two styles of payment models introduced for ACO by CMS
1: One-sided Payment Model
2: Two-sided Payment Model
One sided model: This model offered shared savings for the first 2 years and for the third year shared losses were added to it too.
Two sided model: This model offered shared savings and losses for all 3 years.
In 2015 DHHS offered the final regulation altering the provider’s financial incentive which included that if following one-sided model the provider assumed no financial risk for all 3 yrs and shared the cost savings above 2%. For Two-sided model the 2% saving bench mark was removed and while providers did assume some financial risk but could share in any savings that occur.
The traditional Medicare approach of fee for service can sometimes drive up costs because the providers get paid for each test and procedures even when sometime they may not be needed. An ACO creates a more incentive based approach and the participants are offered bonuses for keeping the cost down and keeping the patient actually out of unnecessary hospital stays and repeat ER visits. An ACO works better if the population size is larger as the risks and cost estimates tend to be much more accurate in such scenario. If an ACO manages to keep expenditures under or on the target, they get to enjoy incentives as well as the savings plus some ACO contracts also offer bonuses.
The CMS evaluates an ACO’s performance on the merits of five areas which include
1. Patient/Caregiver experience
2. Care coordination
3. patient safety
4. Preventive health
5. At risk population (frail elderly health)
Health care providers can use tools like administrative data,web interface database designed for practice or patient experience of care survey.
SHOULD YOU JOIN AN ACO? WHAT ARE THE BENEFITS?
An ACO formation should be approached as a business strategy and if it’s worked like a well-oiled machine, there is much economic success. The key benefits of being part of an ACO includes
Becoming part of an ACO can be great in keeping increased costs checked as this is the concept behind this idea. As opposed to traditional fee for service model an ACO actually gives you incentives and bonuses for keeping your patient healthy and applying better preventive practices to keep your patient out of the hospital. This cuts down the cost of running unnecessary tests and procedures and also hospital stays and emergency room visit thus also resulting in your increased savings.
By joining an ACO a provider can employ a more broader and coordinated approach towards providing healthcare to its patients as compared to working independently where a provider might have to consider financial risks when determining a detailed treatment plan for its patient with complicated or chronic illnesses.
Being part of an ACO helps you make sure and be certain that in case of a possible financial loss due to any number of reasons, the burden of it is divided over the whole organization and you alone don’t have to face it as compared to if you are working independently where all risks fall squarely on your shoulder.
Being part of an ACO helps you enjoy and share the vast range of resources and tools available all over the group. You can share and evaluate treatment strategies and more efficient investigative tools and technologies as opposed to the restrictions you might face in terms of limited resources and tools if you are working independently.
While Medicare automatically enrolls patient into an ACO, non-Medicare patients can also be encouraged to take advantage of this ‘’one stop shop’’ which will result in the whole treatment plan and strategy revolving around their needs instead of their insurers requirements. They can still choose to see a provider outside of their network or choose to not disclose their information within an ACO network thus giving them the control over their plan and helping them receive a more focused plan designed more around preventive aspects of their disease.
THE BENEFITS FOR PATIENTS:
The key benefit that a patient enjoys by being part of an ACO is that the care revolves around the needs of the patient and are not according to what their health insurers might dictate. The care provided to them is more connected and in flow and precise. The better communication channels present in an ACO between their primary care physician and hospitals helps in achieving a more focused and better quality of care.
HOW TO MAXIMIZE YOUR BENEFITS IF YOU ARE PART OF AN ACO:
While the benefits of being in an ACO may sound very enticing it can be a bit challenging to achieve them in the first place or maintain a sustained outcome of profit. By taking a couple of below mentioned measures you can however get a good idea of how to stay at the top of your game
Chronic illnesses bring in more savings for the healthcare providers. If you are able to reduce repeat visits and unnecessary tests of such patients you can see increased savings.
By communicating more openly and effectively you can make your network more strong and more up to patient satisfaction as well as minimizing your own losses due to possible miscommunication within your network. Learn to see and recognize the changing payment patterns and evolving payment structures and understand what that might mean for your practice. Reach out with in your network and be open to suggestions for improvement. A successful ACO needs a strong leadership and organizational structure including better administrative resources to achieve better quality care provision for a large population so try and design an efficient service delivery model to keep your network strong and successful.
Healthcare structures are constantly evolving so know your bearings, understand your position as compared to your competitor for the same target customer. Evaluate risks and establish a more strong network presence to stay ahead of your competitors.
In order to treat a patient effectively and efficiently you need access to all the information available regarding the patient so for that you need access to EHR. This is also where the major financial risk of this whole setup lies. Establishing tools to support EHR like the softwares and the hardware can drive up the costs.
ACO concept is more patient centered and physician led. It’s constantly evolving and more and more health care providers are joining one. While there is definite financial gain in joining one; some choose to stay cautious or seem not interested due to absence of the right infrastructure to support this business strategy. The major part of it being successful depends on the right technological tools, resources and properly well managed referral setup with in a network. The whole concept of ACO is based on lowering financial risk for the provider when dealing with complicated illnesses and being rewarded for keeping patient healthy and out of hospitals which ultimately can lead to higher patient satisfaction.