Accountable Care Organizations

If you haven’t heard of Accountable Care Organizations, commonly referred to with the acronym ACO, you should know that they have the potential to revolutionize the health care industry. The ACO concept is in its early stages yet it can be broadly defined as a collection of health care professionals and constituents who join forces to voluntarily provide elite level care to patients. In terms of the professionals who are a part of these groups, they range from doctors and health plans to entire hospitals. This is an organized effort to enhance the level of care provided to needy patients with a particular focus on those who are chronically ill. It’s all about getting the right type of care in a timely manner while preventing unnecessary patient pain and suffering.

Accountable Care Organizations Originations

The concept of Accountable Care Organizations was created by Dr. Elliott Fisher back in 2006. He is a highly respected doctor and currently serves as the Dartmouth Medical School’s Director of the Center for Health Policy Research. When Fisher coined the term ACO, it immediately made waves throughout the medical community. Once the Affordable Care Act (ACA) made its way into the mainstream political dialogue in 2009, the term ACO began spilling into the mainstream.

The Aim of Accountable Care Organizations

ACOs are all about health care providers stepping away from the narrow scope of their traditional responsibilities and branching out in an altruistic manner. The drive behind ACOs is to combine the effort, knowledge and skills of clinicians, medical administrators, health systems, vendors and others to provide care in a collaborative manner. Each of these parties brings unique skills to the table that can greatly benefit those who are in need of medical care.

Accountable Care Organizations Pay Models

There is no uniform payment model for ACOs. Rather, there are all sorts of unique models ranging from specific payment levels for certain maladies to fees for distinct services with/without arrangements for shared savings. The overarching trend is toward paying for actual value received as opposed to the conventional transaction centered model. In terms of what might be in store for the future, industry experts agree that ACOs will likely be paid through a payment model that offers positive reinforcement for quality care with a focus on efficiency and safety. We’re trending toward compensation that hinges on actual positive health outcomes for patients.

Accountable Care Organizations Accountability

Medical care provided by ACOs are patient-centric. This is a refreshing change compared to profit-driven medical care offer by traditional providers. ACOs are responsible to patients as well as third-party payers for high-quality medical care implemented in a safe manner. ACOs do much more than merely provide high-quality care to those in need of medical attention. They also work with patients to impart knowledge and advice regarding preventive health care. This is a stark contrast compared to traditional for-profit care providers. ACOs are all about actually preventing sickness and disability in order to avoid having to treat someone who is already ill. Those who provide care through ACOs do not use costly methods of treatment that just hit the market. Rather, they employ proven medical treatments and actually assume some or all of the insurance risk.

A new Role for Physicians

Patients who participate in a plan make claims against the provider’s aggregate resources. All revenues are fixed in order for doctors to function as patient insurers. This makes doctors responsible for patients’ health care costs across posterity as long as enrollment continues. It is worth noting that larger providers treat a considerable number of people which affords them the opportunity to juggle service requirement idiosyncrasies. Whether it is costs or standards of service, managing risk becomes much easier for providers with large populations. Yet large providers tend to have a more volatile yearly cash flow compared to those that service a smaller group of patients. These smaller providers are commonly challenged by cost fluctuations that are often created by a handful of especially needy patients.

What Makes Effective Accountable Health Organizations

While ACOs represent an important conceptual breakthrough in the field of health care, they are not all equally efficient. The best ACOs provide high-quality medical care in a timely manner. While traditional health care has struggled with efficiency and integration challenges, elite ACOs are perfectly aligned to serve their members. There is a strong focus on building a culture that revolves around patient needs and desires.

Elite ACOs strive to maintain a well-defined organizational structure that serves patients as well as care providers. The most effective ACOs are capable of prioritizing needs by pinpointing high volume areas and patients with enhanced risk. This distinction allows ACOs to better understand issues that affect costs. Perhaps most important is administrative resources and the sheer number of qualified clinical staff members. A constant supply of primary care providers (PCPs) who are willing to manage patient populations of varying sizes is an absolute necessity. Furthermore, effective ACOs require considerable staff members, financial support and time to properly manage patients. Anyone who has worked for an ACO will testify that highly efficient service requires a great deal of preparation and alignment. If an ACO is underfunded, understaffed or overstressed, service will suffer. Thankfully, the vast majority of Accountable Care Organizations operate with remarkable efficiency that delights patients as well as their caregivers.