Healthcare News & Insights

What you should consider before joining an ACO

Before your facility links up with partners to join an accountable care organization (ACO), leaders need to consider several important factors — like if it’s really worth the effort.

accountable-care-signACOs present a new opportunity to earn revenue by taking on more risk and finding the most efficient ways to deliver care.

But in order for these organizations to be effective in the long term, leaders need to lay down a solid foundation with partners first.

Questions to ask before

It’s important for groups to thoroughly understand the market they want to serve and assume risk for, as well as the amount of coordination among partners it takes to meet those goals, says recent an article by Healthcare Finance News.

Dr. Bob Williams, director of Deloitte Consulting, recommends leaders consider self-insured workers or health plans willing to share risk as potential markets.

Additionally, partners in ACOs need to understand how they’ll coordinate certain fundamental capabilities, beyond clinical functions, if they intend to be effective under the different payment models. For example:

  • actuarial processes
  • data management, and
  • population health

Leaders also should consider how ACO payment models will affect revenue cycles and the flow of funds among partners. “If you are receiving money for that risk, how will you share it? Make it clear upfront,” says Dr. Williams.

To help your ACO stay on track with its goals, Dr. Williams also recommends groups set up three-year strategic road maps, which can also help facilities communicate directions with partners like physician practices or community providers.

ACOs v. bundled payments

Taking early steps to create a cost-effective and efficient ACO can have a lot of positive benefits down the road.

But the fact remains, not every facility is suited for an ACO, and may be better suited for other models — like bundled payments.

A recent report by the Center for American Progress investigated how effective the Centers for Medicare & Medicaid Services’ (CMS) ACO payment models were at reducing costs and improving care.

The nonprofit think tank found that CMS’ Pioneer ACO program only cut spending by 0.67%, and occasionally raised questions about how well care was actually improved.

Instead, the group advised CMS to expand its bundled payment programs, saying they better address specific care and quality areas. The group also believes facilities would be able to more quickly adopt bundled payment models than ACO models.

However, CMS seems to be aware of the Pioneer program’s shortcomings, and has been trying to address those issues with new, reformed ACO models.

So while bundled payments may be a good short-term option for some facilities, providers should consider how CMS’ evolving ACO system aligns with your facility’s changing finances.

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