So you want to be an ACO. Choose a winning strategy that does well by doing good.

Accountable Care Organizations are all the rage in the health policy world.  They're going to reorganize the delivery of health care in a way that improves clinical outcomes and reduces the cost of health care.  ACOs will receive bundled payment for 'episodes of care' and if they do a good job will benefit from the savings.

In theory this is a terrific idea and it may in fact turn out well.  We'll have to be on the lookout for interpretation of ACO that might lead some organizations to dump complicated patients (they'll hurt the bottom line), or to limit care in a way that erodes the clinical outcomes & experience of care (think back to the experience of some under the old 'gatekeeper' approaches that gave managed care a bad name).

What predicts a winner in the ACO world?

• The ACOs that win will be those that figure out how to keep their whole vertical organization whole while investing in interventions that significantly reduce preventable emergency room use and hospitalization
• They'll need to know where to focus interventions, so will need very good data and analytic capabilities
• The ACO winners will reach for an increasing share of the primary care market or will have to mothball hospital bed while dialing back on the capacity of their procedure shops
• The winners will invest their primary care network with the tools and resources necessary to deliver effective primary care (and will need a means to disseminate new techniques and strategies)
• • Primary care that has excellent delivery of:
  • • Access
    • Continuity/relationship/communication
    • Comprehensive services (delivering more of the care in & through primary care)
    • Care coordination (the primary care team is the source of coordination through the entire ACO)

When primary care is delivered well, populations served achieve the goals that will be set for ACOs by the payers: improved clinical outcomes, improved experience of care, reduce the total cost of health care delivery.  When primary care is delivered well, the cost improvements come as a benefit of good outcomes and not as a trade-off from onerous restrictions and expensive & wasteful 'prior authorization' interventions.

This does not have to be done through a big and expensive bureaucracy in the ACO - the primary care work force knows what it should be doing.  The PCPs may need some help understanding how to move from groups of co-workers to high functioning teams, they definitely need some help getting off the hamster wheel so that they can focus on their patient needs and less on the administrative nonsense, they need measurement approaches that identify actionable and accountable behavior of the primary care practice so that they can make appropriate course correction.

There are terrific models of teaching primary care networks how to work in this brave new world, the impediment is not the willingness to engage in this new work, it is in the compensation policies that reward volume with only lip service paid to quality, it is in payment policies that reward volume instead of care, it is in cost containment strategies that push oceans of paperwork and 'check-the-box' silliness onto underfunded primary care practices.

Real success in the ACO world requires an honest review of current policies and aggressive shift of those policies to support care delivery that achieves the outcomes.  The ACO world is predicated on a dramatic shift in payment policy. 

The choice is now up to the delivery system: do you want to be a winner?

Comments

[Jean Antonucci]

mm.
Good post
and comments
Here in a world of small rural hospitals- market share isn't the issue. They mean well but can only from practical point of view have volume as their energy source
If the same old same old stakeholders run ACOs they will turn a great idea into the usual malfunctioning dinosaur
Need some levergae in payment or?? to put primary care in the driver seat

[L Gordon Moore]

I totally agree with you. One of the options we must explore is the unaffiliated primary care group - unfettered by having to shore up a disinterested hospital system.

[Robert]

In response to your two answers:

1. not very likely
2. based on what we see in Massachusetts and elsewhere, I think a hospital would be more likely to use market share to jack up prices.

I'm just getting very sceptical about the ability of docs practicing good medicine to control costs in face of the overwhelming drive of hospital (chains) to maximize revenue!

[L Gordon Moore]

This is an excellent question. There are two answers I can imagine:
1: The hospital does it for the greater good.
2: The hospital does it to gain market share and therefore maintains full bed and procedure use.
Gordon

[Robert]

I still haven't heard any logical explanation of why a hospital in an ACO would have any motivation to reduce procedures, auxilliary services, admissions, etc.? Any thoughts?