Accountable Care Organizations
for the Layperson

An Accountable Care Organization is a new model of providing healthcare. ACOs are becoming more popular because they might improve patient care and simultaneously reduce health-care costs. Under the old “per service” model of healthcare, the patient is primarily cared for by one personal physician and pays per service rendered. In accountable care organizations the patient is cared for by a network of specialized professionals. The entire network is paid out a set amount per patient cared for which is distributed to the various professionals.

Reward for Health

The idea behind the ACO is that the ACO’s network of caregivers will be rewarded for keeping patients healthy. Accountable care organizations are given bonuses for meeting health criteria that prove they are helping patients to stay healthy. Under a fee per services system health-care providers are actually penalized for having healthy patients because healthy patients don’t require many services. The fee per service system rewards health-care providers who perform unnecessary tests, schedule unnecessary appointments and keep their patients chronically ill instead of curing them. In the ACO environment a patient who is perfectly healthy and needs no care produces the maximum amount of profit for the health-care providers. The hope is that by aligning financial incentives with health care goals patients will receive better care at lower costs.

 

The idea of paying a set amount per patient always brings up the HMO, which did not work too well. One major reason why the HMO didn’t work is that health-care providers didn’t have access to data. The health-care provider struggling to provide quality care at low cost under the HMO model was unable to improve treatment tactics because there was no way to measure the effectiveness of each healthcare approach. Under the HMO model the only data available were the health-care claims (services rendered). There were no data available about the healthy patients- they basically vanished from the system. In today’s ACO environment, the hope is that healthcare analytics of “big data” will provide the measures of health necessary to modify practice patterns to maximize health and reduce costs simultaneously.

Big Data

The ACO solution to the HMO’s problems relies on the advent of the electronic health care record (EHR). Healthcare analytics cannot be performed without the raw data being collected in the first place. But if all patient data is input into EHRs, the next step is to simply analyze it to measure the quality of care the ACO is providing. ACOs are paying particular attention to management of patients with chronic conditions, and also to management of healthy patients. The ACO will maximize profits if more patients can be cared for through wellness- maintenance programs instead of waiting for the patients to get ill.

It’s a Team Effort

Standardization and coordination of care across various health-care providers is an aspect of the ACO that is unique. Because a patient is being cared for by a team of providers rather than by one personal physician the ACO has to institute standardized care guides for treatment. The production of and implementation of evidence-based standardized care guides may improve patient outcomes. Without access to up-to-date patient care guides many physicians will continue to use older, less effective care approaches. In the prior health care system it often took as long as 20 years for a newer, more effective intervention to be taken up by practicing physicians. In the ACO solution, more effective interventions can be introduced to health-care providers as soon as the interventions are proven to work.

Ultimately, the success of the ACO solution depends on a mind-set shift. If physicians continue to think in a “My patient” way rather than in a team-oriented way the ACO won’t be successful. And physicians will need to start thinking about shared risks instead of personal risks. For example, instead of sending a questionable patient to the hospital out of fear of taking on too much personal risk for the patient’s health, the physician will need to consider the hospital’s risk burden in health-care decisions.