Many health care providers are attempting to consolidate into Accountable Care Organizations (ACOs), due in part to health reform legislation that requires an ACO model to be up and running for Medicare beneficiaries by January 1, 2012.
The ACO movement has been driven by the American Medical Group Association and its many member groups. These organizations are already accountable to the communities they serve, are integrated systems that coordinate care, have already invested in the use of electronic medical records and have cultures that are physician-led and embody ideas of continuous quality improvement.
“These organizations that track records for quality improvement and cost trend management are far outperforming the fragmented care that exists across the country and is paid for through the traditional fee-for-service model,” says Ronald Copeland, M.D., president and executive medical director of the Ohio Permanente Medical Group. “That is what got the policy-makers’ attention: results — higher quality and lower costs.”
Smart Business spoke with Dr. Copeland about how ACOs are changing the playing field in health care.
Why are ACOs becoming more prominent?
It began when some of the lobbying groups from the large multi-specialty health care groups started working with policy makers on the idea that if you want to transform the health care delivery system, you should have a policy that drives change in payment. Under the ACO model, physicians are paid for quality outcomes and cost trend management, not just the quantity of the work done, which is the way the fee-for-service world works.
What exactly is an ACO?
By definition, these are health care organizations that contract to provide services for a defined population of Medicare patients. Accountability is the key; you have to be able to take care of a whole population of patients and be accountable for them, not just deal with the accountability of each single patient.
The notion is you take a defined population of Medicare patients, take accountability for their health and wellness, have a certain set of metrics for quality of care, and also be measured on cost trends and expenses. If the ACO can achieve quality outcomes at lower costs because of its efficiency, then Medicare will allow the ACO to share in those savings. It is not a threat to patients, because ACOs have to get the quality outcomes for the population. If you don’t have those metrics, then you don’t get the dollars.
