Accountable Care Organizations: Here to Stay?

It’s clear that no matter how the Supreme Court rules on healthcare reform, the way health care is delivered in the U.S. is changing dramatically. The consensus among healthcare experts is that a new delivery model called the Accountable Care Organization (ACO) is here to stay. The ACO model brings healthcare providers together under one business umbrella to manage the needs of patients. Unlike the HMO model of the 80s, which was led by insurance companies, the ACO approach is driven more by physicians and hospital groups. The goal with this model is to increase the quality of care while keeping costs down. Providers share any cost savings associated with their services as long as they meet certain quality-of-care requirements. The move is a significant one; it’s taking the industry from what has traditionally been focused on fee-for-service with rewards for volume to more of a shared-risk strategy that relies on fee-for-performance. Unlike HMOs, this model is also patient-centric; the goal is to improve quality and lower costs – without limiting choice (which, as many will remember, was one of the leading consumer frustrations with HMO plans).

ACOs are still in their infancy, but many healthcare providers are pooling their resources.  Local companies, such as Waltham, Mass.-based Medventive, stand out by helping healthcare organizations use technology, including clinical-integration and risk-management tools, to successfully transform themselves into ACOs. Other key strategies of successful ACOs include integrated-care models that improve communication between primary care doctors, specialists, hospitals and other caregivers and allow providers to focus more on case management and preventative care.

In Massachusetts, Senate President Therese Murray is working on a major healthcare bill that would also move the industry away from a traditional fee-for-service approach and toward more of an ACO approach. The bill is another effort by the Commonwealth to address the soaring costs of healthcare.

In recent remarks to the Greater Boston Chamber of Commerce, Murray noted that “Hospital systems have stepped up their efforts to provide quality health care within set budgets.” Murray referenced five Massachusetts healthcare systems that were recognized this year by the U.S. Department of Health and Human Services as “Pioneer Accountable Care Organizations” for “providing better care at a lower cost by emphasizing primary, preventative care, improving integration between doctors and reducing unnecessary tests and hospitalizations.”

Thirty two Pioneer ACOs have been selected nationwide –including Partners HealthCare, Steward Health Care System, the Beth Israel Deaconess Physician Organization, Mount Auburn Cambridge Independent Practice Association and Atrius Health in Massachusetts.  The purpose is to test different payment arrangements for Medicare beneficiaries that support these organizations in providing better outcomes at a lower cost and, ultimately, to demonstrate the viability of the ACO model to all patients. As Dr. Gene Lindsey, president and CEO of Atrius Health, said in a recent article, Atrius “follows the ‘Triple Aim’ — high-quality care of the individual, improving the health of populations and doing it all at sustainable costs.”  That sums it up nicely.

What do you think? Will ACOs succeed? Why or why not?

Stacey Mann is EVP, Account Services for Greenough. Follow her on Twitter @sliedermanmann