Accountable Care Organizations Role in a Health Care Organizaton

Health care organizations of limited means, with only a handful of physicians, lack the resources of large corporate hospital systems and teaching institutions. Diverse physician specialties, in-house referrals, informations systems, on-site pharmacies, laboratories and clinicians, increased collaboration and coordinated patient health care all assist in more positive health care outcomes, and defray costs. But most small practices lack such crucial resources. Most of america is vastly rural and served by these limited means practices; in fact the majority of americans are served by practices with eight physicians or less, according to Wagner, Lee and Glaser. Accountable Care Organizations (ACOs) are fundamental in helping fill this resource gap for smaller health care organizations.

ACOs are a groups or networks of providers, physicians, clinicians and other health care specialists, whose common mission is to improve the quality of health care services, patient satisfaction and cost controls for a defined population segment. ACOs first materialized as a means of collaboration and integration between hospitals and physicians. The essence being most physicians at practices and hospitals already operate as informal networks for such things as referrals, laboratory tests and procedures. ACOs surfaced as a more formalized incarnation of this physician/provider network, and the Affordable Care Act helped to formalize ACOs even more.

The Affordable Care Act permits Medicare programs to contract with ACOs, in order to provide incentives and benchmark standards for quality, satisfaction and control of costs. Before acceptance, ACOs must meet the stringent quality, cost and patient satisfaction data capture and reporting requirements for least three years, on thousands of beneficiaries. Upon contracting, ACOs voluntarily meet cost thresholds across these outcome measures and must fully demonstrate the ability to maintain and report on such indicators. The idea being a mutual shared savings by both the ACOs and Medicare and an increase in collaboration and resources for those practices lacking. ACOs also lay the foundation for Medicare to modify its payment model and methods. The CMS pay for service model has been seen as unsustainable and Medicare is moving more toward a bundled payment mode, where CMS pays for an episode of care, and hospitals and physicians get paid jointly. Instead of paying for each provider, visit, procedure, test and medication independently. “An estimated 30% of traditional Medicare payments [are] now flowing through alternative payment models like bundled payments or accountable care organizations.” (Obama. 2016).

The benefits of ACOs are immense and have an enormous impact on smaller health care organizations. It gives them the ability to collaborate more fluidly with other physicians providing care throughout a vast network, improving overall quality. Patient satisfaction has been considerably improved as patients don’t feel handed off; they instead feel the referral physicians are better informed, more capable and are providing a continuum of care. Incentives for keeping people well have have made it beneficial to optimize the care quality of the patients and control costs. “[ACOs, bundled payments] and related reforms have contributed to a sustained period of slow growth in per-enrollee health care spending and improvements in health care quality” (Obama. 2016).

One of the greatest contributors to quality, satisfaction and cost controls are health information systems, and more specifically, electronic medical/health record (EM/HR) systems, and ACOs provide the ideal framework for their implementation. Having a network of health information systems for an ACOs network of health care providers seems like a logical next step. And EHR systems, properly deployed, increase quality of care, reduce errors and duplication of orders for tests and medications, markedly reducing negative outcomes. Patient satisfaction has been shown to be substantially increased when a physician utilizes an EMR system during consultations. They are seen as more competent by using the latest technologies. Furthermore, EHR systems allow the patient to be better informed, able to contribute, and have more control and say over their health care.

Not everything about ACOs is rosy. Since one of the primary missions of ACOs is to improve overall health care quality for a defined population segment. Where these defined population segments are those predominantly lacking in resources. One would think that mental health would be a top priority. That is not the case according to a recent study: “ACO contracts were associated with no changes in mental health spending or readmissions, outpatient follow-up after mental health admissions, rates of depression diagnosis, or mental health status. These results suggest that ACOs have not yet focused on mental illness or have been largely unsuccessful in early efforts to improve their management of it.” (Busch, Huskamp, McWilliams. 2016).

Large medical teaching institutions and corporate hospitals systems have a great many means and resources, and are a network of health care professionals by definition. However, most of the United States is exceedingly rural and served by practices with eight physicians or fewer. ACOs help fill this gap by allowing physicians and providers in smaller health care organizations to be part of a larger network. The Affordable Care Act helps formalize the ACOs by contracting with them for mutual cost savings, patient satisfaction and improved health care outcomes; including the furthering of otherwise unobtainable technologies like EHR systems, which only facilitate a greater return on investment for quality, cost and patient satisfaction.

Wager, K. A., Lee, F. W., Glaser, J. P. (2009). Health care information systems: A practical approach for health care management. San Francisco, CA: Jossey-Bass.

Obama, B. (2016). United States Health Care Reform. Jama, 316(5), 525. doi:10.1001/jama.2016.9797

Alisa B. Busch, Haiden A. Huskamp and J. Michael McWilliams. Early Efforts By Medicare Accountable Care Organizations Have Limited Effect On Mental Illness Care And Management. Health Affairs 35, no.7 (2016):1247-1256 doi: 10.1377/hlthaff.2015.1669