What Leads to Success under the ACO Model?

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SUCCESS-thumb1Some healthcare experts have charged that ACOs are actually a retread of HMOs, writes Greg Freeman in the December 2013 edition of Managed Care Contracting and Reimbursement Advisor, a newsletter from HealthLeaders Media. But Ben Wanamaker, executive director of the Clayton Christensen Institute’s healthcare program, sees vast differences between the two care models.

For one thing, he said, HMOs used gatekeepers to control costs, and these gatekeepers were paid under a fee-for-service model.

According to Wanamaker, “ACOs seek to control costs and improve quality-something HMOs didn’t claim to do–by changing the payment mechanism so that providers are going to be at risk for what they are calling quality. But most of the measures are not what I call quality measures, but process measures.”

How will this affect the nation’s physicians? Wanamaker says it will probably have a negative impact on independent practices because acquisitions are vital to the ACO model, a model that seems to be founded on the idea that “he who has the largest number of members wins.”

Furthermore, if you’re a physician with years of experience and highly specialized skills, you won’t be very impressed with your income under ACOs, Wanamaker adds.

Freeman writes, “For the best chance at economic success within an ACO, Wanamaker says physicians should seek maximum transparency between fee-for-service and ACO patients so that they can develop clinical-care processes that optimize the economic outcome. Know who is in which payment bucket, and develop clinical-care protocols for both types of patient. There might be more than one way to do the right thing for a patient, resulting in the same clinical outcome but a significantly different economic outcome for that patient.”

If you’re sensing a moral conundrum behind this survival philosophy, you would be correct. Wanamaker says, “That might sound insensitive in a way because, of course, the doctor should do the best possible thing for the patient no matter what. But the doctor also has an incentive to make a living, and under a fee-for-service arrangement, they likely will avoid some options if they can’t be reimbursed for it. There are always judgments to be made.”

There are other viewpoints expressed within the article. We’ll dissect those viewpoints in upcoming posts, but in the meantime, what is your stand on ACOs? Is your organization actively involved in becoming one? When Wanamaker states, “he who has the largest number of members wins,” is there truth in this philosophy? Is this the way an organization becomes successful under the ACO model?

-by Pete Fernbaugh

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