Freed Associates

ACOs: Now What? The Next Step in the Future of Health Care

TOPIC: Accountable Care Organizations, Population Health

Is the Accountable Care Organization (ACO) model sustainable? In their first years, ACOs focused on reducing health care utilization: decreasing avoidable admissions, readmissions, and emergency department visits, as well as increasing generic medication fills. As demonstrated in various local and national ACO initiatives, when hospitals, providers, and payer groups collaborate, they tend to succeed in that goal. Health care utilization decreases, post-discharge care improves, and efforts are streamlined to minimize duplication. These activities have yielded a significant return on investment for participants, saving millions of dollars in health care costs.

ACO participants are now challenged to continue this level of success. The next step will require a fundamental reorganization of how health care operates. It will demand creativity in contracting, expansion of community and vendor relationships, and adjusting where care is delivered. The next wave of interventions should focus on activities in the ambulatory setting, and on leveraging business intelligence for long-term sustainability.

Focus on the Ambulatory Setting

ACOs strive for high quality, cost effective care delivery. Given that most health care is delivered at the provider or specialist’s office, fully achieving that goal will require organizations to focus primarily on their ambulatory operations. Provider groups need to either consider expanded wraparound interdisciplinary services or redesign how provider practices operate. Housing primary care providers, specialists, ancillary providers, and case managers at a central location can be effective, as can nontraditional vendors such as mobile pharmacy health clinics. Evaluating whether high risk or disease-specific clinics are needed for urgent or after-hours care can identify a potential savings opportunity and reduce emergency department visits. Such activities will improve care coordination and quality, foster teamwork, reduce duplicative services, minimize out-of-network challenges, and improve overall patient satisfaction.

Hospitals also play a role in the effective delivery of ambulatory services. One example is the implementation of a post-discharge clinic where patients can be seen by their hospitalists or specialists before being handed off to their primary care providers. Investing in transitional units for short stays or partnering with Skilled Nursing Facilities (SNFs) to immediately redirect non-acute patients can provide significant efficiencies by reducing readmissions and supporting the continuum of care.

Leverage Business Intelligence

Comprehensive business intelligence involves using clinical and financial data to provide the means for ACO partnerships to identify best practices, manage risk, guide strategic planning, and drive competitive advantage. A comprehensive approach that allows data analysis and sharing is critical to strategy and business model support. It is also vital to measuring program performance. Information obtained from the data can help ACOs increase reimbursement, identify cost inefficiencies, improve operational workflows, tailor unique interventions for specific populations, drive contractual relationships, and offset activities to support wellness and preventive health care.

Most organizations have not fully leveraged the data their systems are amassing. Business intelligence provides direction in determining what to do with the data, and also in developing and implementing tailored programs that current efforts aimed at purchasing EMRs and related tools do not achieve. The development of patient-specific, practice performance, and quality dashboards that combine clinical and financial data will provide partners with information to inform action plans aimed at proactively improving care efficiency while pinpointing potential savings.

ACOs are the foundation for the future of sustainable health care delivery. Now that they are addressing the immediate expectations of efficiency and effectiveness, they need to focus on leveraging their business intelligence efforts to identify the more elusive savings that will sustain them in the long run.