Health IT: The ACO Backbone

Accountable Care Organization (ACO) is the new buzz word in the healthcare world. ACO, a term coined by Dr. Elliott Fischer in 2006, describes the development of partnership between hospitals and physicians to coordinate and deliver efficient care. There has always been a need for an alternative healthcare delivery model due to inability of the current Medicare FFS payment system to reduce healthcare spending. The goal of ACO is to improve the health of a defined population through care coordination and increased quality services at reduced cost. 

ACO & Health Reforms

ACO has been included in the Patient Protection Affordable Care Act (PPACA) under SEC 1899 Medicare Shared Savings Program. Providers who meet the specified criteria will work together to manage and coordinate care for Medicare FFS beneficiaries under Part A and Part B through an ACO. A participating ACO will receive payment of shared savings if it achieves the established quality performance benchmarks. After the enactment of PPACA, a number of providers and payers developing ACOs have increased substantially.

PPACA has established the following guidelines for participating ACOs.

•    Accountability for the quality, cost and overall care of Medicare FFS beneficiaries

• Establish a formal legal, leadership and management structure that will allow the organization to receive and distribute shared savings payments including clinical and administrative systems
• Include sufficient number of primary care professionals
• Promote evidence-based medicine and patient engagement
• Report on quality and cost measures
• Coordinate care through the use of telehealth, remote patient monitoring and other enabling technologies

ACO vs HMO

Though HMO and ACO model share commonalities there are couple of differences in ACO

• Providers or provider groups, rather than insurance companies, are evaluated on the quality and outcome of care. 
• Direct contracting with provider organizations without health plan intermediaries.
• Accept new payment models liked “shared savings” approach to share in any savings as a result of reduced costs and bundled payments.
• Payment approach is related to the level of financial risk the providers will assume.
• PCPs are not just gate-keepers, but also care coordinators

ACO has the potential to redefine the US healthcare landscape. However, its critics claim that it is old wine in new bottle.  Providers and Payers have already started to claim that they satisfy ACO requirements and they look forward to take ACO model concept to commercial markets and employers. 

Role of Health IT

ACO will require Telehealth, EHR, Health Insurance Exchanges and Analytics to meet its goals. Hence the role of Health IT towards the success of the ACO model is paramount. Hence it is not surprising to find its mention in PPACA.

PPACA mentions that under the Medicare Shared Savings Program, group of providers may work together to manage and coordinate care. At a minimum, ACO must have atleast 5000 beneficiaries assigned to it. Health IT will play a crucial role in coordinating care between these beneficiaries and health care providers which include physicians, hospitals and other providers. Physicians could use Telehealth and remote monitoring to improve quality and provide care at reduced costs.  Remote monitoring will help in preventing complications by early symptom diagnosis.

The PPACA and HITECH provisions together will stimulate the growth of ACOs. For example, HITECH provides a stimulus funding of $548 million to setup Health Information Exchanges to enable organizations to share data and improve patient care. Physicians are also mandated to adopt EHRs and achieve meaningful use. HIE will provide connectivity of disparate clinical systems and interoperability of clinical information captured by them. Hence providers in an ACO can share clinical data with each other. EHRs will automate and streamline a physician’s workflow and will also support evidence-based decision support, quality management and outcomes reporting which are essential for efficient functioning of an ACO.

ACOs will be required to provide reports regarding care transitions across healthcare settings, including discharge planning and post-discharge follow-up by ACO professionals. ACOs will be required to provide data related to clinical outcomes, quality and efficiency measures, pay for performance reporting gain and participating professionals. Health IT will help ACOs in achieving these requirements.

Business Intelligence capabilities like predictive modeling and correlation analysis will be required by ACOs to identify inefficient operational areas, analyze historical healthcare outcomes data, predict cost of care and also to comparing the performance of participating providers.

Finally as Tom Enders says, “HIT investments to achieve ACO status will go beyond those required to address other HIT trends, such as meeting EHR meaningful use criteria, converting to ICD-10 coding standards and evolving pay-for-performance and value-based purchasing initiatives. As a result, organizations aspiring to ACO implementation need to carefully consider how they allocate spending for HIT along with other demands over the next decade”.

About The Author

Deepak Padmanabhan works as a Lead Business Analyst in the Health IT field. His areas of interests include Health Reforms, ICD-10, HIPAA 5010 and Health Innovations. He is a certified Project Management Professional (PMP) and Fellow, Academy of Healthcare Management (FAHM).