Read about the Tipping Point in Healthcare: Are ACOs the Way to Go?

1. “ACOs offer a way for disparate providers to come
together and act as if they are clinically integrated,”
says Albert Tomchaney, M.D., senior vice president
and chief medical officer of Franciscan Alliance in
Indianapolis. “In most cases, care coordination hasn’t
been set up this way. Patients have had to make sure
themselves that all their medical activities are coor-
dinated. But ACOs, by design, are supposed to be
about administering care across a care continuum.”
In recent years, the medical community has
amassed more and more data about patient outcomes,
and “it just doesn’t make any sense when we see
incredible variation in care,” Tomchaney says. “That
data has helped set a platform for the realization that
we have a better way to move forward.” For some
organizations, that better way is to form or join an
ACO. Here’s what you need to know about them.
A Foundation for ACOs
The Affordable Care Act specifically mentioned
ACOs and paved the way for hospitals and physicians
to form accountable care organizations. Earlier this
year, 32 leading health-care organizations from across
the country began participating in a new Pioneer ACO
initiative, which was expected to save up to $1.1 bil-
lion over five years, according to Health and Human
Services Secretary Kathleen Sebelius.
Tipping
Health Care at a But ACOs are not an entirely new idea. “Models
like this have been talked about for 10 years or more,”
Tomchaney says. “The Mayo Clinic, the Cleveland
Clinic and others have long been clinically integrated,
where nothing happens in a silo. And Elliott Fisher
Point
wrote about such a model at Dartmouth years ago.”
In addition to the models in practice at some lead-
ing academic medical centers, the concept of clinical
integration has even been attempted by Medicare
before. Modern ACOs are linked to the Medicare’s
Physician Group Practice (PGP) Demonstration,
which ran from 2005–2008, says Bill Woodson,
A
senior vice president and national thought leader
Are ACOs the Way Forward? for Sg2, a health-care intelligence and information
services company based in Skokie, Ill. In that project,
ccountable care organizations 10 large physician groups participated “in something
(ACOs), included in the Patient that looked like an ACO,” Woodson continues. “In the
Protection and Affordable Care end, they all achieved quality improvements, but they
Act as a new model for deliv- didn’t necessarily cut costs.”
ering services to patients, have However, much was learned from the PGP
received a great deal of atten- Demonstration that can inform the formation of ACOs,
tion. The model is intended to encourage primary care including “what tools to use and how to conduct out-
doctors, specialists, hospitals and other caregivers reach to a population,” Woodson says.
to provide better, more coordinated care for people In addition to the lessons learned from past attempts,
with Medicare while cutting costs. But as with any technology has been improved and widely distrib-
change to patient care delivery, joining or forming an uted, which makes a new attempt at coordinated care
ACO is not an easy fix. more feasible. “The electronic era and information
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2. technology, while still working through some issues, cost more and do not necessarily yield better quality,
are supportive of this model,” Tomchaney says. Wessels says.
At Franciscan Alliance, which is part of the Pioneer “A lot of people have back pain, for example. It may
ACO, a common IT platform across ACO provider be just a fact of being human, but it can be treated
offices, as well as electronic medical records and other with surgery. A lot of physicians end up doing a lot of
built-in tools, have allowed for better communication procedures that create relief temporarily but in the
among providers. In addition, modern decision support long-term, the outcomes for those who have surgery
software—incorporated across ACO providers—helps and those who don’t have surgery are the same. Either
each entity provide the right care at the right time, he way, the patient is convinced the doctor helped him
says. For instance, if a patient visits his primary care or her—either by relieving the pain with surgery or
doctor, who has the ultimate responsibility for manag- by helping them deal with chronic pain. If we can get
ing all his chronic conditions, the doctor’s computer doctors on the same page to discuss what is the most
system will tell him “what the patient has done to meet conservative thing we can do to treat this common
desired outcomes, as well as what he hasn’t done,” problem, the outcomes improve.”
Tomchaney explains. This clinical integration is the major selling point
for ACOs. By working in concert to treat a community
Banking on Advantages of patients, “care will shift to less costly settings and “It can be
Updated technology and new processes have led to readmission rates will decrease,” Woodson says. “As challenging to
early successes for ACOs, highlighting the advantages a result, ACOs will improve the health status of the undertake the
that these models can bring to a community and to population they serve.” prospect of
patients. For providers, “it’s about innovating in their In order to accomplish these results, ACOs realign an ACO while
service delivery area,” says Gunter Wessels, partner the incentives of health-care delivery, paying for treat- maintaining
and health-care practice principal at Total Innovation ment quality rather than treatment volume. “the mindset
Group, Inc., which consults with ACOs on commer- of redefining
cialization efforts. “The reason for an ACO is to create Considering the Challenges value to
alignment, to do the same thing to the same sorts of While ACOs sound promising, “making the required everyone.” The
patients every time, so that quality is achieved.” cultural transformation is very hard,” Woodson goal has to be
For instance, currently there is a focus on doing acknowledges. “And there are a lot of unknowns about an outcome of
more complex and more severe procedures, which whether they will work.” better care at
For physicians and health- a much lower
care facilities, launching or cost.”
joining an ACO usually means
making significant investments Albert Tomchaney, M.D.
of time and money to set up the
systems and reconfigure their
business models.
“Medical practices need to
transform into medical home
models, which incurs costs
in finances and resources,”
Tomchaney says. “Providers
are being asked to retool and
redesign their processes, and
right now, the amount they
need to spend and the amount
they will get back from the pay-
ers is probably not a dollar for
dollar exchange.”
In addition to fronting the
capital to switch to an ACO
system, physicians and health-
care facilities also must rethink
their traditional methods of
operating.
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3. Moving Forward
For hospitals and physicians who are considering
a move to an ACO or similar coordinated care model,
it’s helpful to have a broad understanding of the cul-
tural transformation risk. When Sg2 clients consider
launching such a collaboration, “we caution them
that going into this model is very risky,” Woodson
says. “You need to understand what your financial
exposure is going to be. And be deliberate about your
timing: Don’t be reactive.”
To make an ACO work, advanced systems for
transferring information are required. In many orga-
nizations, a switch to electronic medical records and
the use of mobile devices such as smart phones and
tablet computers may have set the groundwork for a
successful ACO, Tomchaney says.
In addition to providing systems for various pro-
viders to communicate with each other about patient
care, successful ACOs also utilize technology to get
patients more involved in their own care.
“You have to have a transformation process that lets
you reach out to patients in ways you haven’t before,”
Successful ACOs utilize Tomchaney says. “For instance, Franciscan Alliance
has a patient portal that allows patients to get online
technology to get patients more to see their lab results, make their own appointments
involved in their own care. and do other tasks. That helps empower the patient
to be more accountable in their own care.”
While not every health-care organization is rushing
“Historically, we have been trained to do things to form an ACO, there is widespread agreement that
in an opposite way,” Wessels says. “Physicians are the future model of providing care will look different
having to change quickly, and health-care organiza- from today.
tions were originally set up based on a compensation “Many of our clients see this as a transition model,”
model that is changing before their eyes.” Woodson says. “It may not necessarily be the way
Participation and leadership from physicians is we’ll end up, but it is a change that is moving us on
vital in making ACOs work, according to Woodson. the way to where we’re going.”
But in many places, the deeper pockets of a local What will the end result look like? Nobody can be
“Many of our hospital or hospital group are required to finance sure, but there is likely to be considerable variation,
Clients see this the technology, staff and other upfront costs associ- Woodson says. For instance, in some rural areas, ACOs
as a transition ated with launching an ACO. While hospitals may may not be feasible. Academic medical centers may
model. It may be needed to make an ACO work, they can also have relationships with ACOs but not be a part of one.
not necessarily “become a cost center” when the model takes off, Each facility and group of providers must consider
be the way as the emphasis will be on treating patients in medi- the needs and resources of their local communities.
we’ll end cal offices and keeping them out of the hospital to Even if forming an ACO is not the answer for your
up, but it is a cut costs, Woodson says. organization, it’s important to be asking questions
change that It can be challenging to undertake the prospect of and looking for the right solution.
is moving us an ACO while maintaining “the mindset of redefining “The current costs of health care are not sustain-
on the way to value to everyone,” Tomchaney adds. “The goal has able,” Tomchaney says. “The country is aging. If we
where we’re to be an outcome of better care at a much lower cost.” think we have issues today, think of what it will be like
going.” Finally, ACOs just won’t work well in all areas. 10 years from now, with no more money and lots more
Bill Woodson “Not every geographic location can be an ACO area,” people needing health care. We are at a tipping point.
Wessels says. “You can’t stack incentives in every This isn’t going to go away, no matter the outcome of
place. The majority of the impact of ACOs will be the upcoming presidential election. The need for more
in population centers.” coordinated care is here to stay, no matter what.” S
26 The Source | Fourth Quarter 2012