The ABCs of ACOs

We're conducting extensive research into the effective use of ACOs (Accountable Care Organizations)and have come away with some key conclusions:

-- BE PART OF THE SOLUTION: ACOs, available in 2012, are presented as a solution to the mounting cost of Medicare and Medicaid; the US government is attempting to stem to rising tide of such outlays.

-- A BALANCING ACT: ACOs are in effect a new way of organizing patient care around set populations ("beneficiaries") who theoretically will receive more community-based, integrated care under the reward provisions of the program (which are allegedly invisible to the beneficiaries). But the rewards won't be paid unless monetary targets are met, so this whole delicate balancing act of quality performance and patient care cutbacks will play out under a new scenario.

-- BE IN IT TO WIN IT: For a hospital or physician group, sitting on the sidelines is not a viable option as patient populations will migrate with primary care physicians migrating into ACOs; translation, get in or lose market share.

-- A BIGGER PIECE OF THE PIE: As the Medicare population continues to grow, and US govt. spends more and more on debt interest payments, there will simply be less money available on a per patient basis so efficiencies are certainly in order; the thinking with ACOs is that hospitals will lose volume in order to hit performance targets, but will gain market share by increasing their beneficiary base (the competition for primary care physicians and their patient populations should be reasonably fierce)

-- IN THE DRIVER'S SEAT: This is an attempt at a cultural shift, moving care rewards/responsibilities to the primary care physician; the primary care physicians now have a lot of control, but, despite the temptation, they can't build their own ACOs without a great deal of capital, IT infrastructure and professional management; current thinking is that hospitals will invest heavily in this game.

-- IN FAVOR OF FLEXIBILITY: There is a great deal of flexibility built into ACOs, both in the types available for those willing to set one up (there are three types of ACOs available, ranging from low risk/low reward to high risk/high reward), and for the beneficiaries, who have free choices of health care providers (in theory, they do, but they are generally influenced by their primary care providers as far as hospital/lab/specialist choices).

-- MORE TO COME: Anti-trust and anti-kickback waivers will have to be granted by the FTC and other Federal Agencies in order to allow the participants in ACOs to function in their new roles without violating any laws; the interpretations by such agencies will have a profound influence on the spirit of the law, either preserving it or killing it by dilluting the risk/reward provisions; much remains to be resolved and until it is, there is a perfect opportunity for procrastination, but don't be fooled because this baby is going through so place your best bets as to how it will end up.

We could go on, but the deal is, thePiecesFit, a team of diligent health care experts, is prepared to provide your organization, whether it's a hospital, a medical society, a physician's group or whatever, with a focused strategic and financial analysis -- an ACO readiness assessment.

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