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A closer look at ACOs

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   By Dr. Fauzia Khan, M.D., FCAP, January 2012

Patients and quality care come first.

Requiring the person or people responsible for the care of an individual to be accountable for the outcomes of that care seems like a reasonable progression in today’s healthcare landscape. What remains to be seen and is still a serious point of contention is how to best execute accountable care. Accountable care organizations (ACOs) are destined to change the healthcare structure and have been designed to reduce the overwhelming costs of Medicare and Medicaid. ACOs have captured the attention of the industry, but what will their true impact be?  

As proposed cuts to Medicare/Medicaid are being debated in Congress, the healthcare industry has the opportunity to closely observe this impact. The challenge is finding an objective voice with the best interest of the patient in mind. Tying ACOs to cuts in Medicare spending along with taxation implications focuses the conversation around an economic discussion rather than one that is focused on patient care.  

For the ACO model to be successful, it is critical to have quality as the focus with improved patient care as the end result. Incentives need to be aligned with the needs of the provider and the payer to achieve what is best for the patient and to push the system toward a providing-care model rather than a fee-for-service model. Additionally, the patient must also be engaged in his or her care. Healthcare is unique in that the consumer – the patient – has very little say in the purchase decision.  Instead, the providers and payers make those decisions for the patient in many cases. Educating and engaging the patient can empower the consumer to assist in making the most prudent and economical choices.

The final rule on ACOs was issued by CMS in late 2011, and the shared-savings program begins in early 2012. Organizations in the pilot program that have been established as risk-bearing providers for many years demonstrate that it is possible to facilitate seamless and coordinated care. For organizations just getting started on the path toward connectivity and accountable care, the revised final rule makes it easier and more lucrative to get involved now rather than wait for years to see the long-term success rates of others. While there does still seem to be some concern surrounding the expense and risk of entering into an ACO, the overall benefits of increased reimbursement for meeting quality measures, improvement in patient care, reduction in overall healthcare costs and the mechanism to analyze clinical outcomes based on actual data and improve measures accordingly will likely be worth the upfront investment.

The healthcare entities that comprise the ACO must have open communication to meet the ultimate goals of improving care while reducing costs. Sharing data, open communication in a secure environment and recommending financial arrangements that emphasize risk sharing with providers all require connectivity across multiple facilities and stakeholders in the continuum of care. An HIE or EMR alone traditionally cannot accomplish this. Additional healthcare IT resources are required to connect beyond the encounter to assign roles across the legal entity of the ACO. An ACO will also require detailed analytics based on clinical and financial data. It will need to benchmark and track the performance of care providers and the financial performance based on the predetermined goals of the organization. As a collective, the healthcare industry must forge ahead with strategies and solutions that highlight how clinical decision support and analytics can help standardize healthcare delivery.

Providers will rely more heavily on clinical decision support to help them manage risk and optimize their payments while also improving patient outcomes. What must remain at the forefront of discussions and legislation is the patient. Historically, physicians have been leery of patients self-educating via online resources. However, it is now time for physicians to embrace these resources, and to provide their own resources for education at the point of care. An educated patient will be more likely to comply with his or her prescribed treatment plan, thereby helping to improve the outcomes on which the physician will be measured. If all of these elements of technology, patient engagement and open communication across multiple stakeholders can come together, this new model of healthcare may prove to be one of the best medicine options yet.


Fauzia Khan, M.D., FCAP, is co-founder and chief medical officed of DiagnosisOne. For more on DiagnosisOne solutions, click here.


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