Include Your Advancement Director in ACO Planning

What's wrong with this picture? In most cases, only the most enlightened hospital and healthcare system leaders include their top advancement officers in strategic planning. Typically, the hospital bakes the strategic plan and then asks its advancement director to raise funds for the XYZ objective, whether or not XYZ has any philanthropic appeal to donors. With advancement at the planning table from the very beginning, the strategies for sourcing revenue for various objectives can be more effectively — and realistically — accomplished.

In this era of shrinking operating margins and spotty investment returns, philanthropic dollars will play an increasingly important role in maintaining hospital excellence and supporting new endeavors — including the transition to the accountable care organization model. With the results of the 2012 presidential election, it is clear that ACOs will become the new backbone of healthcare systems, and that hospitals and systems will have to embrace these models sooner, rather than later, if they are to stay competitive.

It is easy to become overwhelmed trying to make sense of all the intertwined and essential elements that compose a successful ACO. Clearly, the race is on to design local and regional ACOs of manageable scale that will simultaneously cover adequate numbers of patients and make money. Market leaders are hard at work using a variety of incentives to recruit practitioners and provider organizations, building cross-platform data systems, conducting community health assessments, establishing standards of care and selecting payor strategies that work for everyone. It is an enormous task, complicated by the uncharted nature of the journey.  

Hospitals and health systems are emerging as anchors for many ACOs. As a result, the smartest, most strategic leaders will include advancement in ACO planning. The reality: launching great program plans and visionary ideas requires resources and money. And while funds are not a restricting issue for some systems, limited resources are the reality for most would-be ACOs.

Healthcare advancement officers are becoming more aware of their role in supporting their organizations' adoption of ACO models. This is occurring in individual organizations and professional associations alike. For example, at the October 2012 Association for Healthcare Philanthropy Conference in Atlanta, a group of healthcare advancement officers launched the ACO Philanthropy Strategy Group to introduce ACO philanthropy into the industry lexicon, help author the ACO fundraising case for support and to and develop resources for the work that lies ahead.  

Some traditional fund raising activities, like supporting capital projects and equipment, will always be important to hospitals and ACOs. At the same time, the ACO model creates entirely new targets and donor incentives for philanthropy. These include:

ACO hospital and physician integration. The recruiting of top-tier primary care and specialist physicians can be supported with donor-supported funds, which are often named for the donor, and created expressly for this purpose.  

Building information powered health systems. Philanthropy can enable the purchase of advanced technologies and equipment for hospitals and community health initiatives. As the justification for non-profit status comes under greater scrutiny, this use of philanthropic dollars can emphasize the community service being done by the ACO-anchoring hospital and how they are helping ACOs achieve higher quality and lower cost healthcare.

Clinical transformation. As the ACO model encourages the improvement and dissemination of evidence-based clinical practice guidelines, funding clinician training on these new standards of care and procedures could be a very attractive philanthropic cause for donors. Eventually, it is anticipated that reimbursement will be tied to clinicians' use of evidence-based standards of care.

Payment transformation. At the end of the day, high-performing ACOs will generate increasingly positive health outcome measures, healthier members, and lower costs — and will be rewarded financially for these accomplishments. As it has for decades, philanthropy can play a valuable indirect role here, as donors are likely to fund what they consider "winning" and well run organizations over those that are struggling with finances and operations.  

Communities will have diverse health needs and some will be overarching — like reducing the incidence of obesity and resulting type II diabetes. Other communities will have greater geriatric concerns; some will be more focused on achieving healthy birth outcomes. Philanthropy's support of these broader community health initiatives will help improve community health status. More globally-minded donors may also make larger contributions to initiatives that hold promise for improving our nation's health.

It is going to take an "all hands on deck" approach to quickly and effectively transform our current healthcare system into the new accountable care system. There are many interdependent moving parts that need to mesh to form a successful ACO. An important hand to have on the deck — from planning through implementation and evaluation — is your advancement director. He or she can help translate ACO objectives into attractive, achievable fundraising opportunities, while representing your major donors and key fundraising constituents in the conversation. Remember, philanthropy generates the highest margin source of revenue in all of healthcare, typically around 70 percent.   

There is no better source of revenues to help fuel the creation of ACOs than funders who are committed to seeing this new healthcare model succeed. And there's absolutely nothing wrong with that picture.

Larry G. Raff, MPH, is president and principal of Copley Raff, Inc., a leading philanthropy consulting firm based near Boston. He brings three decades of leadership and experience to healthcare organizations seeking advancement results. His clients include four of New England's largest multi-hospital systems, the largest multi-hospital system in the midwest, numerous academic medical centers and community health centers. He also provides counsel to national scope organizations including the American Optometric Association, National Consumer Law Center, National Association of County and City Health Officials and the Massachusetts Medical Society.

More Articles on Healthcare Fundraising:

Philanthropy's Important Role in the Transition to Accountable Care Organizations

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