The Role of Accountable Care Organizations in the Future of Health Care
Accountable care organizations are changing the way health care is delivered – from a fee-for-service model to value-based care. What ripple effects will this have for the health care industry and its professionals?
The Affordable Care Act (ACA), commonly referred to as Obamacare, was introduced with the intention of helping to expand coverage, control health care costs and improve health care delivery across the country. It is rapidly changing how health care services are paid for and delivered by all types of health-care professionals.
It has also helped popularize the term value-based health care, described by Michael E. Porter and Thomas H. Lee MD in the Harvard Business Review as being, at its core, about “achieving the best outcomes at the lowest cost.” This is all part of a push to provide health care that is coordinated, high quality and cost effective.
A critical component of this program is the establishment of value-based reimbursement structures, or accountable care organizations.
What is an Accountable Care Organization?
An accountable care organization (ACO) is a network of doctors, specialists, hospitals, home health practitioners and other medical providers who voluntarily work together to provide coordinated, high-quality care to their Medicare patients, rather than operating individually.
The hope is that better communication and coordination can occur within the network of the ACO, leading to higher-quality health care and reductions in unnecessary spending, duplication of services and medical errors.
As stipulated under the Medicare Shared Savings Program, ACOs are eligible for financial rewards if they can “lower their growth in health care costs while meeting performance standards on quality of care.” Provider participation is voluntary, with the requirement that the ACO treat at least 5000 Medicare patients every three years. There are several different ACO programs that healthcare professionals can adopt, based on the scale of their ACO initiative.
For those providers who are interested in entering into an ACO or growing their existing ACO, explore the Centers for Medicare and Medicaid Services site for webinar recordings and material on patient activation and engagement in ACOs and improving ACO cost and quality outcomes.
Where Do ACOs Stand Today?
There are now 775 ACOs registered across the U.S., covering about 20 million people. Of those, about 7.8 million are part of Medicare, with the remainder from the commercial and Medicaid sectors.
Almost every state has at least one ACO – California tops the list with more than 80 ACOs and almost one million people covered.
According to the latest research by Oliver Wyman, almost 70 percent of the population now live in localities served by ACOs and 44 percent live in areas served by two or more.
What Are the Benefits of an ACO?
Compared with traditional fee-for-service (FFS) health care, there are many advantages associated with an ACO. These include reduced paperwork, better coordination and communication and better out-of-hours accessibility.
By emphasizing the importance of creating a coordinated and patient-centered care system, the ACO approach shares many of the characteristics of the Patient-Centered Medical Home (PCMH) care model, which was developed in 2007 by the American Academy of Family Physicians (AAFP) in conjunction with other U.S. medical organizations.
As pediatrician Donald M. Berwick wrote in The New England Journal of Medicine, the goal of coordinated health is to provide the patient with more “quality time” with their physician and care team, and greater collaboration between practice and patient which will help the patient lead a more healthy life.
He points to the “tyranny of the 15-minute visit” as a limiting factor for providers who want to provide the best care possible for their patients.
This holistic, personalized approach to health care is steadily gaining ground. According to data drawn from various sources by the UC Berkeley Center for Health care Organization, Innovation and Research (CHOIR), the PCMH model is becoming more popular among both large and small practices, although adoption is currently dominated by larger providers at 53.4 percent, compared to 29.1 percent for smaller providers.
The studies found that large multi‐specialty medical groups do, in fact, provide higher-quality care at lower cost than other provider organizations. In California, researchers have found that higher levels of pre-existing managed care are associated with higher levels of ACO enrollment and growth.
The Future of the ACO in U.S. Health Care
As the U.S. population ages, a medical community that puts more value on integrated and preventative treatments is going to become an increasingly important feature of the health care landscape.
Some experts warn that the ACO system still needs further refinement, as it could lead to the emergence of ‘mega providers’ that use their market leverage to drive up health costs and limit patient choice. Regardless, it represents a critical first step towards a more efficient and effective health care sector.
For those health-care professionals who want to learn more about the latest shifts and changes in their industry, an advanced degree may be the right decision.
