5 Critical ACO Success Factors

As the healthcare environment moves from fee-for-service to pay-for-performance and from fragmented to coordinated care, many healthcare providers are considering developing or joining accountable care organizations. Because of that dramatic shift in mindset these organizations require, not every ACO will succeed. In order to improve your ACOs chance for success, Terri Welter, principal at ECG Management Consultants, says ACOs should focus on five critical success factors.  

1. Clinical integration. Successful ACOs will be built upon the foundation of clinical integration, because fundamental to success in an ACO is the ability to collaborate on and coordinate care. Different hospitals use a variety of different relationships to integrate and align with physicians, including employment, co-management relationships, physician hospital organizations and other arrangements, which complicates this concept.

All of these different approaches can successfully create an integrated system. However, the approach must create interdependence among institutions and practitioners and facilitate collaboration and the sharing of information with a focus on improved clinical outcomes and efficiencies.

Hospitals that aren't yet involved in an ACO or the movement toward value-based payment and care delivery arrangements should begin their foray into this new frontier by examining the degree of integration they have with their physicians. "Hospitals will need to take a broad-scale look at their relationships with physicians and determine what methods are best for them to become more integrated," says Ms. Welter.

2. Ability to manage care. The goal of an ACO is to reduce the need for care by promoting health and managing illness. This focus on managing care for a population is a dramatic shift for hospitals, which are currently paid with a fee-for-service approach. Under ACOs, providers will be rewarded for quality, receiving payments for meeting certain measures surrounding care management. “The accountable care environment's focus on quality helps ensure these organizations are not constructed purely to drive down utilization,” says Ms. Welter

“Successfully managing the care of a population is best achieved with the use of evidence-based care pathways,” she says. “The development of care pathways requires the involvement of an engaged medical staff, so the ability to successfully manage care depends upon one's level of clinical integration.”

3. ACO members have aligned incentives. Parties who are members of the ACO need to have aligned incentives in terms of driving quality and cost efficiencies, says Ms. Welter. "It sounds cliché, but it's absolutely essential. If you have physicians who are reimbursed for productivity and the goal of the ACO is driving value, that's a problem."

This requires a shift in physician practices from reimbursing for the number of services provided to reimbursing for managing health and reducing the need for services. "Physicians need to be paid for outcomes and meeting value based goals," says Ms. Welter.

4.  IT infrastructure. IT infrastructure that enhances care coordination as well as allows for reporting will be necessary for success within an ACO. "Not only will there need to be a sharing of information across providers, but you also have to be able to study how you're doing in terms of outcomes," says Ms. Welter.

She recommends analyzing outcomes and cost data no less than quarterly and as frequently as monthly — an activity that is much more manageable with advanced IT systems. HIT tools can also provide clinical decision support to physicians to help ensure they follow the evidence-based care pathways that drive the group's ability to appropriately manage care.

5. Adopting the ACO model across payors.
Although the development of ACOs is driven by CMS' program, Ms. Welter believes this type of environment shouldn't be limited to just government payors. "If we're really going to make broad scale changes in bending the cost curve, we have to move beyond Medicare," says Ms. Welter. "If we become and ACO for Medicare, why shouldn't we apply the same approach, with appropriate nuances, to other payors? In order to effect medical expense and improve outcomes, there needs to be a wider contracting strategy."

Learn more about ECG Management Consultants, Inc.
Contact Ms. Welter at (703) 522-8450 or twelter@ecgmc.com





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