Accountable Care Organizations

Accountable Care Organizations, Value Metrics and Capital Formation, by Robert James Cimasi, CRC Press, 2013   

An accountable care organization is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements  - money - to quality metrics and reductions in the total cost of care of an assigned group of patients – results.  This is revolutionary, a concept that seems so near – we’ve got numbers and analytics – and yet so far – how do we measure success in this complex field? 

How to measure quality of healthcare?

How to reduce costs?  The section on Value-based Purchasing, for those of us who grew up in the purchasing, later supply management world, shocking because it links quality patient outcomes with expenditures or cost of care.   The author offers various models and policy initiatives, some of which are in partial test, and updates on other initiatives at beginning stages of organization.  For example, in April of 2011, seven markets were selected to participate in an implementation of the Comprehensive Primary Care Initiatives; the seven markets in eight states were chosen as representative of major US regions.  Despite the formation of this initiative, the response was mixed.  According to the author, the AMA (American Medical Association) expressed “distaste” for the ACO concept, “stating that it made physician participation in ACO’s ‘difficult, if not impossible.”  If physicians are critical to implementation of any changes in this very complex system, and AMA says they don’t like it, what’s a consumer to do?

The author cites another approach – the Pioneer ACO Model – a program made up of 32 healthcare institutions with a potential to save “up to $1.1 b over five years through better, more coordinated care for Medicare beneficiaries.”   The scale of potential savings checks out with what we non-professionals, consumers already know about the size of this not-for-profit industry – at 17% of the US GDP – its growth and segmentation offers endless opportunities for improvement and change.    The Pioneer ACO Model, which shows projected Medicare savings of $430 million, contains 33 Quality Measures governing patient outcomes.  Participating institutions include these very recognizable names:  Beth Israel Deaconess in Boston, a leader in some lean initiatives,   the University of Michigan, Banner, and Mount Auburn Cambridge Independent Practice Association. 

So what is the impact of these ACDs on the healthcare industry?  The author lists potential structural barriers to formation of an ACO, including one big barrier, technology that may just be the first to fall.  Other structural challenges include scale, competition, physician support, and the weight of governmental policy and its political timescale.