How will Accountable Care Organizations impact the healthcare industry?

As hospitals and physicians across America begin forming Accountable Care Organizations (ACOs) in order to help integrate care, manage chronic conditions, and facilitate evidence-based practices, the question arises as to how quickly these organizations will develop. We turned to our panel of accountable care experts and asked them to share their opinions on the role of ACOs in the healthcare industry. Here’s what they had to say:

Peter McGrath, co-founder and CEO of Coriendo, LLC, addresses the use of technology solutions that are necessary to support an ACO. In order for an ACO to be successful, the organization needs to be able to track and monitor in one digital location all of a patient’s electronic health records. McGrath explains that his firm has built a “health information exchange for two government agencies that needed to exchange health records (the DoD and the VA).” In addition, the technological solution must allow for the allocation of billing associated with the care provided by the various health care providers that are participants in the ACO. Using a Business Process Management suite of software tools called ‘Enj,’ McGrath is able to configure these solutions with little or no computer coding. Therefore, using such methods ACOs should be able to avoid technological impediments. McGrath understands that ultimately, the development of ACOs will be driven by “the desire to provide the highest quality care while at the same time delivering this care as efficiently as possible and at the lowest possible cost.”

Milt Schachter, founder of one of the first federally qualified HMO’s in the Midwest, explains that establishing ACO models that are similar to types created by HMOs and PHOs in the late 1980’s and 1990’s can lead to significant development and growth within a few years. Schachter notes that when he led an HMO – then a PHO and a provider organization – his company accepted capitation, global risk, and a percentage of premium arrangements that proved to be quite successful. However, the true key “is to configure the risk model into a win-win arrangement rather than trying to out-negotiate the other party.” It is important for the incentives and risks to be properly aligned for all concerned parties. Ranels59, Regional Director at Healthcare Partners Medical Group, one of five ACO pilot sites in the country, believes that the outcome of ACO development will depend largely on the “seamless integration between the provider organization and the health plans.” If there is little or no intervention by the provider organization, the ACO has the potential to grow very rapidly.

Healthcare_Trembo, a specialist in healthcare finance, reimbursement systems, and business process engineering for over 20 years, says that certain parts of the country will accept risk very quickly. Referencing Massachusetts, Healthcare_Trembo states that not only is there a long history of capitation or global payment, but also that Blue Cross Blue Shield in this state has a large global payment project from the Alternative Quality Contract (AQC) under way. Further, he points to Governor Deval Patrick’s statement that, “his administration would like to move the entire state to global payment for all payers other than Medicare, which is controlled by the federal government.” Healthcare_Trembo feels that the acceptance of financial risk requires the coordination of delivery of care and a mechanism to share financial risk among providers who use the ACO to manage risk. However, there is “no magic in the term Accountable Care Organization; it can simply be any organization where the healthcare providers are committed to collectively managing quality of care and financial risk.”

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