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88 New ACO Organizations – What Does That Mean?

Posted on July 24, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

It has been a really interesting couple months for those interested in ACO’s (Accountable Care Organizations) and healthcare. I love how Gregg Masters of ACO Watch called the ACO the “Child of the ACA (Accountable Care Act).” He even declares the SCOTUS supreme court ruling as a big battle won for the ACO. I certainly can’t disagree with him when it comes to the government ACO initiatives. The loss of ACA would definitely hamper much of the government’s work on ACOs. Although, he also acknowledges that ACA is still up in the air pending the Presidential election. ACA is directly in the republican cross hairs.

Politics aside, the ACO program is going forward. CMS recently named 88 new Accountable Care Organizations (ACOs) that will take part in the Medicare Shared Saving Program (Originally it was 89 ACOs, but one organization dropped out).

You can see the full list of ACOs on the press release linked above, but I really like this image that The Advisory Board Company put together that shows the location of the various ACOs across the US (click image twice for full size):

I think this represents a pretty good distribution across the country. However, there are a few things that I find a bit disturbing about the organizations participating in the government ACO programs. The first is that many healthcare organizations that you think would be perfect fit for an ACO aren’t participating. Kaiser and IHC come to mind. I’ve heard that both organizations are very interested in ACOs, but not the government ACO programs. I think this is a bad sign for the government sponsored ACO programs.

The second is that only five of the ACOs applied for the version of the Medicare Shared Savings Program where they have a chance to earn a higher share of any savings, but they’ll also be accountable for any losses if the cost o the care increases. You might take a look back at my ACO Risks and Reward post. These five organizations have gone all in with the ACO program. With that said, I wonder why only five of them chose to participate in it? Shouldn’t we want more organizations to have some accountability and responsibility if they don’t improve care and lower costs?

As I have pointed out before, the ACO movement is happening and is not likely to slow down. Even if ACA or other government legislation is repealed, the move to ACOs is going to happen. With that knowledge and some of the comments above, it makes me wonder if the government should be the one funding an ACO initiative. Will their involvement help or hurt the overall ACO movement?

I’ll be interested to see how it goes for these new ACOs. As we’ve seen with EHR and meaningful use, we’ll have to be careful to filter through the messages coming out of CMS about the success or failure of the ACOs. As they progress we’re going to have to reach out to the ACOs and hear the first hand stories. If you’re an organization that’s participating, we’d love to hear your thoughts in the comments.

ACO’s Compensate for Something Doctors Influence Not Control

Posted on April 3, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In my previous post about the ACO Risks and Rewards, I suggested that providers do indeed take on a greater portion of risk in an ACO, but that also opens them up to larger reward possibilities as well. I think this is very much the case and will be an important aspect of healthcare going forward. Many are going to do very well with an ACO if they create the right partnerships.

However, that post on ACO risks and rewards didn’t address what could be physician’s biggest concern with ACOs. This concern is that the ACOs will compensate doctors for something that they they only influence as opposed to control.

Jim Brule, a past healthcare CIO, provided a good summary of this challenge on a LinkedIn thread that I started asking if EMRs were harder to use than paper as was asserted by Anne Zieger in the article linked. Here’s Jim’s comments about ACOs:

I think ACOs – in principle – provide the structure necessary for value-based healthcare. However, a lot of work is necessary to ensure that any given ACO is structured to actually reinforce better outcomes.

One of the key components of that is patient engagement, which many providers are nervous about, as it means tying their compensation to something they influence, not control. I understand their concern, but believe that we need to move in that direction.

It’s definitely a challenge to the ACO model, but like Jim Brule I think we need to and will move in that direction anyway. Jim Brule did also offer what might be the key to allaying physician concerns over an ACO:

Ultimately, though, we can’t do this without good, actionable information – and you’re not going to get that from paper – or free-text notes, electronic or otherwise.

One of the biggest trends we’re going to see in healthcare over the next five years is going to be around data with MUCH of that data coming from the EHR. Some will call it business intelligence. Others will call it data mining. Others will call it big data. I think there’s a few other names out there, but at the end of the day it’s all about taking this voluminous amount of healthcare data and making it actionable and produce results.

Nothing will depend on big data in healthcare more than an ACO. Those vendors who are able to make that data actionable are going to do very well and healthcare costs will benefit from the ACO as well.

ACO Model Risks and Rewards

Posted on February 29, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I haven’t heard a single person say that the ACO (Accountable Care Organization) model is not here to stay. In fact, everyone that I’ve talked to is completely confident that healthcare is heading down the tracks of some sort of quality care model and away from our current fee for service model. The only real question is what form these ACOs are going to take.

With this as background, let’s consider something about ACOs that I haven’t really heard many (if any) people talking about: the risks and reward profiles of being an ACO (or part of an ACO).

I’ll save the detailed list of risks and rewards for a future post, but instead want to highlight how the risks and rewards of an ACO are quite different from our current fee for service model. In our current model, when you provide a service to a patient you have a pretty good idea of what the reward for that service is going to be. Sure, there are intricacies of insurance billing, but for the most part you know what you’re going to be paid for the services you rendered. There’s not very much risk associated with providing that service since the fee for that service is known. We could argue about whether the reward is worth it or not, but in the current model the reward is pretty solidly defined. You don’t get paid more for doing a better knee surgery than someone else. The payment is the same.

The opposite turns out to be the case in a true ACO world. Providers that are caring for a community of people will be rewarded based on the quality of care that they provide that community (at least that’s the idea). That means that providers and ACOs are taking on the risk associated with the care they provide. Bad care = less reimbursement. Better care = more reimbursement. While the associated risk is higher for providers under an ACO, so are the rewards. A provider that provides better care for their community has the possibility of making more money for the care they provided.

As an entrepreneur I must admit that the idea of getting paid more for doing something better than someone else is beautiful. This is even more true in healthcare where I love the idea of a doctor getting paid to really improve my health as opposed to getting paid for services that I may or may not need. Although, I can understand how many doctors might not feel the same way I do. Many doctors aren’t entrepreneurs. They just love medicine and patients. What are these types of doctors to do with this new and evolving ACO model for reimbursement?

I think there is a clear option for doctors that just want to practice medicine without the risk or rewards associated with the ACO model. The way they’ll get around this is likely working for someone else. There’s little doubt that there will be many organizations happy to take on the risk and rewards of the ACO model while paying a physician a salary for their work.

One thing seems clear to me: Providers take on a greater portion of risk in an ACO, but they also have the opportunity to take home a significantly higher net reimbursement.