6 challenges hospitals face in ACO adoption

Hospitals and health systems around the county are entering accountable care organizations to improve the delivery of care. However, as hospitals enter these arrangements, they will be faced with specific challenges to leadership, physician relationships and payment structures as they coordinate care and take on risk for populations whose care may extend beyond the facility itself.

As hospitals begin to take on risk- and value-based ACO models, they should consider the following six challenges, as presented by Leavitt Partners in a report produced in conjunction with the American Hospital Association and the Robert Wood Johnson Foundation.

1. Leadership. As physicians take on increasing prominence in organizational structure of a value-based care initiative, administrators must strike the right balance between providing physicians with autonomy and guidance as the organization implements new processes. ACOs also require a significant amount of coordination and administrative efforts that must be considered before entering a contract.

2. Cultural changes. ACO participation will require constant commitment to quality improvement, which marks a significant change. Leavitt Partners notes that hospitals will need to ensure different departments or providers are not competing against each other and are instead working together.

3. Clinical integration. Clinical integration adds an extra challenge to ACO agreements, as hospitals work to shift to population health management. To keep staff working toward a common goal, it is essential for hospital leaders to communicate a clear vision, according to the report.

4. Distribution of shared savings. The current risk-sharing landscape puts the risk-assumption on the hospital and not on the level of the individual providers. Thus, once shared savings are achieved, hospital leadership must decide how, when, to who and to what degree these funds should be distributed amongst the providers in their organization. It will be important to engage individual providers and keep them incentivized to continually improve on quality measures.

5. Physician alignment. The attribution model puts a stronger emphasis and higher demand on primary care physicians. Hospitals should also reconsider their arrangements with physicians. Acquiring practices can be expensive, so many hospitals are choosing to recruit physician group partners.

6. Payer participation. Providers may not be receiving compensation from patients who are benefiting from accountable care services, but not enrolled in the program, called the "spillover effect." While this is good for the patients, it may weaken the financial stability of the contracts, according to the report. The best strategy for hospitals, according to Leavitt Partners, is to move as much of their business as possible into value-based arrangements.

 

More articles on accountable care:

Dr. Farzad Mostashari on his startup's newest ACO initiatives, physicians' feedback and the Next Generation ACO model
12 recent accountable care, shared savings agreements
Pioneer Program approved for expansion

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