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ACOs: Are Hospitals Going Forward?

The concept of accountable care organizations providing higher quality care at a lower price crosses political lines and is not going away, according to hospital associations, healthcare providers, and industry thought leaders.

"ACOs and the general concept of delivery system reform has always been a bipartisan issue," said Lisa Grabert, senior associate director of policy at the American Hospital Association. "I do not foresee a potential change in administration as a threat to ACOs."

Simon Prince, MD, FACP, FASN, president of Beacon Health Partners (BHP), an independent physician association (IPA) now part of the Medicare Shared Savings Program, said ACOs are worth the investment, regardless of election results.

"Fee-for-service or traditional medicine, without dispute, leads to overutilization," Dr. Prince said. "Not surprisingly, this is being targeted by all the payers, and it has a big bull's-eye. Strategies that can contain costs while providing value are very important, as is positioning yourself in an organization that can be nimble enough to change and adapt to whatever flavor healthcare reform takes on in the years to come. I think the principles of the accountable care organization are going to survive regardless."

New ACOs
From a Medicare standpoint, the Centers for Medicare and Medicaid Services (CMS) define ACOs as groups of doctors, hospitals, and healthcare providers who come together voluntarily to give coordinated, high quality care to the Medicare patients they serve, with a goal of better patient care and lower costs. Private insurers also are beginning to pilot similar programs.

A June report from Leavitt Partners identified 221 CMS and private sector ACOs in 45 states.1 And on the CMS side, a Commonwealth Fund survey showed:

• 154 healthcare providers were participating in ACOs as of summer 2012.
• 32 had signed contracts to become Pioneers.
• 116 had enrolled in the Shared Savings Program.
• Six had joined the Physician Group Practice Transition demonstration.2

However, the ACO movement is still early in the adoption curve, and IT and infrastructure investments preclude many providers from getting involved. Although 84.6 percent of survey respondents who were in or planning to join/form an ACO had IT systems to track utilization, only 49.7 percent said they would "have the financial strength to accept risk." 2

Why Participants Are Getting On Board
In December 2011, CMS chose Austin Regional Clinic (ARC) and Seton Healthcare Family to be part of the Pioneer ACO model and formed the Seton Health Alliance. At the time, ARC had already been involved for a year with Blue Cross/Blue Shield of Texas in a patient-centered Medical Home managing 44,000 attributed patients, so it was a logical progression to move forward with a Medicare version of essentially the same thing, said Norman Chenven, MD, CEO and founder, ARC.

BHP in Manhasset, NY, was selected in July to participate in the Medicare Shared Savings Program. Two years earlier, in the wake of the Affordable Care Act, Dr. Prince was then president of a physician group in a large tertiary hospital, and he was noticing many colleagues leaving for employment at large hospitals and health systems. With the help of a healthcare consultant and attorney, he formed his IPA.

"We believed in the national imperative for payment reform and a change towards value-based payments and the principles of an ACO, so we thought it made sense to start putting the effort together and move in this direction," he said.

Investments in Information Technology
To transition to ACOs, providers are making significant infrastructure improvements to better track patient care with analytics that identify and monitor high-risk individuals and the chronically ill.

"We take a combination of our clinical data from the hospital, laboratory studies, X-ray and diagnostics procedures, and from the medical group's health records and claims data that the payer provides to us," Dr. Chenven said. "And we create a clinical data repository, which is an amalgam of the information that we have about an individual, so we can track if he's doing OK medically. So if there are gaps in the patient's care, let's say it's somebody who's been relatively healthy but hasn't had a mammogram, a colonoscopy - whatever age-appropriate screening or immunization is recommended - we are able to identify that fact and reach out to that patient and get that done. If it's somebody who has a chronic condition like diabetes or elevated cholesterol or hypertension, then we can identify that fact and intervene for the patient's benefit."

One obstacle, Dr. Chenven explained, is most vendors' healthcare software is disparate and doesn't communicate with each other, so health information exchanges are helping to make sense of diverse EHR data and claims reports.

ACOs: Are Hospitals Going Forward?

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