In a recent interview for a keynote speaking opportunity, a State Hospital Association VP quickly moved to their desired agenda. “It’s all about ACOs! What are all the magic numbers? What is the required size (covered lives) of the community? How many primary care providers do we need? How do we measure risk?” The hype and fervor over Accountable Care Organizations is undeniable, but for most unwarranted.
For the vast majority of hospitals, planning for your transition to an Accountable Care Organization is like a high school coach planning on taking his team to the Olympics. While there may be one or two individuals with the potential to compete at that level, they are years away from being ready. The journey will require more training, new measures of performance and the ability to accept some losses.
Accountable Care Organizations represent the holy grail of healthcare delivery systems. While the vision is still being shaped, ACOs encompass all the transformational concepts and evidenced-based practices in development. The Medical Home is a proven model and a critical component of an ACO. When primary care providers are given the resources to aggressively manage the “chronic” 5%, they have the ability to bend 50% of the cost curve.
More than just another ACO component, a robust IT system connecting providers and integrating clinical care is a requirement for survival. Physician employment may be a good first step in the improvement of care coordination. However, real clinical integration and the ability to elevate quality outcomes requires team work and adherence to standardized protocols. New forms of communication will redefine relationships across the continuum and lead to greater collaboration.
Devil is in the Details
Providers have a right to be confused and unsettled by ACO conversations. Many of the necessary partnerships and shared cost savings may be illegal under current Stark law. In addition, ACO regulations scheduled for publication last year are only now approaching final draft form. Most will be surprised if the Secretary of Health and Human Services meets the deadline to pilot ACOs on January 1st of 2012. Kathleen Sebelius has the largest to-do list of any government official in US history.
Long before providers assume insurance risk for covered lives or accept bundled payments; they will be rewarded through value-based purchasing programs. A number of yet-to-be-determined value metrics will define the bonus payments to hospitals and physicians alike. Maintaining the status quo is not an option. Payment will gradually ramp up from shared savings, through the addition of greater risks and rewards, until some level of capitation is achieved in the distant future.
No one becomes an Olympic athlete without setting the bar high and envisioning their medal performance. At the same time, the majority of our hospitals have a long way to go before they can even make the varsity team. Their focus must remain on staying healthy, building muscle and improving performance. The ACO Olympics will come soon enough.