ACCOUNTABLE CARE ORGANIZATION (ACO)
The healthcare industry is evolving from better quality care, availability, and lower cost. One of the significant shifts over the last several decades has been from traditional fee-for-service models focused on volume to value-focused models. Centers for Medicare and Medicaid Insurance (CMS) found that accountable care organizations (ACOs) were a way to control rising costs in healthcare and improve patient outcomes.
ACOs, in turn, change how care is administered, reduce unnecessary services, emphasize prevention, and provide incentives for providers to prevent diseases. With this model, we aim to see if we can begin to have shared financial and medical responsibilities, paving the way to a more efficient, patient-centered healthcare system.
WHAT IS AN ACCOUNTABLE CARE ORGANIZATION?
An Accountable Care Organization (ACO) is formed by physicians, hospitals, and other healthcare providers working together to provide more efficient, high-quality patient care. The core feature of the ACO model is its shared financial and medical responsibility that helps providers enhance their outcomes and cost efficiency.
Once considered a part of Medicare within the Affordable Care Act (ACA), ACOs have seen expansive growth, with leading commercial insurers and private entities coming more into the picture. This model aims to increase care coordination, eliminate unnecessary service provision, and move toward a patient-centered approach across all healthcare systems, regardless of their size.
The ACO payment model aims to reduce costs while enhancing care by shifting from fee-for-service billing to rewarding coordinated care, thereby reducing unnecessary or duplicative services. ACOs can participate in various risk-based contracts ranging from zero risks to effectively managing chronic conditions and organizing appropriate patient care. Through predetermined financial risk/reward structures, providers are encouraged to prioritize preventive health services rather than hospitalization. Following their contract type, ACO members earn monetary incentives if they remain within budgets or face penalties when they exceed spending limits. Moreover, ACOs must report performance data, quality metrics, and savings benchmarks to prove their worthiness.
WHAT AN ACO MEANS FOR PROVIDERS
While participation in an Accountable Care Organization (ACO) is voluntary, many providers seeking to work together on a network to achieve shared savings and minimize total healthcare costs join. As ACOs, providers can communicate with each other across the care continuum, gain access to complete patient data and improve financial viability by attracting more patients.
ACO models encompass:
Medicare Shared Savings Program (MSSP) –
This new era of Medicare fees for service providers represented an evolution from a fee basis to a fee for quality and cost reduction within an ACO framework.
Advance Payment ACO Model – This model is tailored for physician-based and rural providers, offering upfront and monthly payments to develop their care coordination infrastructure.
Pioneer ACO Model – The healthcare organization’s capabilities inform where and how this model operates: it’s designed for organizations that can take more financial risk but achieve higher shared savings.
PROVIDER’S RESPONSIBILITIES TO PATIENTS
When participating in an ACO, providers have specific responsibilities to their patients, including:
- Notifying patients of their participation: Despite the increasing number of accountable care organizations, patients may not be aware of their physician’s participation, as their care and treatment should remain unchanged.
- Informing ACO patients: Physicians must advise patients to choose a different specialist, unlike in a Health Maintenance Organization (HMO), where staying in-network is mandatory.
- Adhering to HIPAA requirements: Patients should know their data may be shared for treatment coordination, adhering to HIPAA.
WHAT AN ACO MEANS TO THE PATIENT
An ACO’s primary mission is to bring care providers together to deliver seamless care, hoping to improve patient outcomes. Financial rewards incentivize providers to invest in patient health and be partners in providing quality care, working jointly with patients to participate in healthcare decision-making.
For generations, patients have been held responsible for coordinating their care, which has often resulted in fragmented treatment, redundant medications, and conflicting advice from different providers. By shifting the focus to holistic patient care and care coordination, several benefits can be achieved:
- Reducing medical errors and avoiding redundant or conflicting treatments.
- Coordinating care to bridge gaps and minimize hospitalizations.
- Improving patient satisfaction with streamlined and cohesive care experiences.
- Lowering overall healthcare costs by optimizing treatment efficiency.
- Emphasizing preventative care to maintain patient health and mitigate the need for reactive interventions solely during illness episodes to align with financial incentives.
INCORPORATING VALUE-BASED CARE
Value-based care aims to enhance the quality of essential healthcare services while minimizing unnecessary ER visits and specialist consultations. Collecting, analysing, and reporting patient data can pose significant challenges for small or rural providers without EHR integration. EHRs are crucial in facilitating data sharing within ACOs and achieving desired outcomes.
E-prescribing helps minimize prescription redundancies and detect fraudulent activities. Automated software support streamlines data compilation and reporting for tracking quality metrics. A global view of patient history and potential drug interactions improves preventative care.
While larger healthcare systems have the resources to invest in patient data tracking, smaller private practices may struggle with initial financial investments. Joining an ACO can alleviate this burden by providing access to necessary technology while maintaining practice autonomy.
ACOs vs. HMOs and Their Impact on Healthcare Quality
ACOs are evaluated based on quality of care. There are concerns about their cost-saving measures, with some health economists worried they will reduce patient care to save expenses. In contrast, others fear that hospital mergers driven by ACO requirements could limit patient choice and inflate healthcare costs. Although the widespread adoption of EHRs by independent practices has facilitated data tracking and reporting, critics have likened ACOs to HMOs, expressing apprehension over potential restrictions on patient options. However, efforts have been made to address past issues associated with HMOs. Notable differences between ACOs and HMOs include:
- In an HMO, patients are only covered for services within the network, whereas an ACO allows patients to seek care outside the network.
- ACOs must meet rigorous quality measures to ensure that cost-saving efforts do not compromise necessary care.
Challenges Facing ACOs Today
Although ACOs are evaluated based on quality of care, there are concerns about their cost-saving measures, with some health economists worried that they would reduce patient care to save on expenses. This is a difficult choice, with some hard questions being asked.
One of the significant areas of concern for ACOs is the unpredictability surrounding patient demographics and its potential impact on organizational goals.
PREPARING FOR THE FUTURE
In the next several years, healthcare providers will look hard at ways to improve care quality, control costs, and use technology to manage regulatory demands, hoping to improve patient outcomes. Innovations like automated software systems can simplify workflows, decrease administrative burdens, and allow providers to dedicate time to personalized patient care while improving efficiency.
In the next several years, healthcare providers will look hard at ways to improve care quality, control costs, and use technology to manage regulatory demands, hoping to improve patient outcomes. Innovations like automated software systems can simplify workflows, decrease administrative burdens, and allow providers to dedicate time to personalized patient care while improving efficiency and doctor-patient relationships. In this regard, automated software systems have several advantages for healthcare providers. These include automatic appointment scheduling, processing bills, and EHR, which is electronic health record- documenting as it reduces the time administrative processes take, enabling caregivers to concentrate on giving care. Additionally, these tools promote team communication, thus optimizing collaboration and care coordination.
Adopting automation in their systems to protect patients’ sensitive information requires providers to ensure data security and privacy as their second priority. The first thing to do if you want patients’ trust not to be broken and legal litigations to be avoided is to adhere to the Health Insurance Portability and Accountability Act (HIPAA), among other laws.
Conclusion
Building automated software systems into practices can ensure that healthcare providers improve patient care, operational efficiency, and adaptability. These technologies aim to allow for rapid, non-invasive inspection and simplifying administrative work cells. By reducing the time people spend doing repetitive tasks, other time can be spent with patients, strengthening doctor-patient relationships and delivering more personalized treatment. Furthermore, these systems were and are adopted by healthcare organizations to position them to meet the needs of growing compliances and new industry standards and the necessity to integrate their organizational cultures and strategies.
