Can ACO’s Live Up to Expectations?

I was fortunate to have been invited to co-author a chapter on merit-based savings distribution models in The ACO Handbook: A Guide to Accountable Care Organizations, Second Edition with Bo Bobbitt.  Bo is a seasoned health care attorney who works with many ACOs and clinically integrated networks. He is with the Smith Anderson law firm in Raleigh, North Carolina, and speaks and writes on this subject extensively.

Breaking down the siloes that exist in our fragmented healthcare system requires the collaborative commitment of clinicians and facilities, and true clinical integration fosters (and, in turn, is promoted by) teamwork, transitional care, reduction in clinical variation, and information-sharing. For the ACO model to be successful, a correlation must exist between financial incentives and the common goals of improving experience of care for patients, improving the health of populations, and reducing the per capita cost of healthcare. 

The notion of a merit-based system of sharing available savings with providers, while relatively simple conceptually, can be difficult to effectively implement unless these principles guide the process: fairness, flexibility, transparency, and openness to input from a broad segment of participating providers. At the same time, the merit-based system should reinforce providers’ motivation to increase the value of the organization through maximizing the quality and cost-effectiveness of care.

One of the challenges facing ACO leaders is in the selection of appropriate metrics by which quality of care is evaluated, recognizing that disparate types and specialties of providers in virtually any clinically integrated organization contribute to quality in often very dissimilar ways. Additionally, various providers contribute to cost savings differently. Measures and the corresponding metrics must recognize these variations and group providers accordingly and address the relative contribution to the value proposition in meaningful ways.

While reimbursement tied to volume is facing a dim future in the growing shadow of payment system reforms tied to quality of care, organizations that embrace value-based care and put in place initiatives that reward individuals and groups of providers for performing the right care in the right place at the right time, often when less care is of greater value, form the basis for the proper clinically integrated organization. Consider engaging legal counsel experienced in ACO formation and operation, and valuation consultants experienced in shared savings models as partners when ACOs are part of your organization’s strategy for the value-based culture.

Organizations considering the ACO as a means to help accomplish the goals of the Triple Aim and successfully navigate the economic reforms that came about as a result of the ACA should consider The ACO Handbook as a must-read.

The ACO Handbook: A Guide to Accountable Care Organizations, Second Edition, was released February 2015 by the American Health Lawyers Association. Edited by Peter Pavarini, Charlene McGinty, and Michael Schaff, with contributing editor Mark Mattioli, The ACO Handbook is a resource on the following aspects of ACOs and other related subjects:

  • Capital, financial and tax implications
  • Compliance, fraud and abuse waivers and antitrust implication
  • Health information technology
  • Quality and performance
  • Certification, credentialing licensure, governance, and management

This book is a good how-to guide when it comes to implementation strategies and in making key decisions on whether to start an ACO, whether to apply for the Medicare Shared Savings Program, and how to enter into strategic partnerships with an ACO.

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Topics: Triple Aim Healthcare

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