Accountable care organizations

1. Accountable Care Organizations

2. Reducing healthcare costs • Reduction of the amount and kind of services used is critical • Policymakers would like physicians (such as anesthesiologists, cardiologists, etc.) to reduce their utilization of healthcare resources • Number of diagnostic tests ordered • Prescribed drugs • Surgical procedure • Facilities surgeries performed at • Affordable Care Act implemented many new policies aimed at changing payment incentives. • changing payment away from a fee-for-service model through the creation of accountable care organizations (ACOs).

3. What are ACOS? • Physicians, hospitals, and other providers that take both clinical and financial responsibility for the care of patients. • ACOs aim to breakdown barriers between primary care physicians, specialists, hospitals, home health care agencies, hospices, pharmacies, and other providers • Coordinate patient care-particularly for patients suffering from chronic illnesses to focus on high-quality, lower-cost interventions • Reduce wasteful duplication of tests and unnecessary interventions, while keeping patients healthy and reducing the need for treatments, specialist referrals, emergency room visits, and long-term hospitalizations.

4. Types of ACO Models and Financial Incentives • Terms to qualify as an ACO • care for 5,000 Medicare beneficiaries • 3 year agreement with Medicare • CMS quality reporting • physician-led governance, • ACOs aim to reduce healthcare costs by altering how payments for services are distributed. • There are three different types of ACO models.

5. ACO Concerns • Most common ACO model is the shared savings • many worry that the initial reliance on fee-for-service payments may still encourage physicians to order more tests, visits, and treatments in order to increase payment. • ACOs entail significant start-up costs for integrated electronic health records, disease registries, effective care management programs, telemedicine, and other monitoring mechanisms. • Others continue to worry that ACOs will ultimately fail due to lack of the appropriate financial and human resource management • Medicare may decrease competition among physicians and hospitals • ACOs rather than engage with Medicare, may negotiate better rates with private insurers and thus eliminate any savings for the overall healthcare system. • Regardless of the concerns over ACOs, the ACO model has undoubtedly taken off-the first quarter of 2016 and recorded 838 ACO organizations distributed across the three models and spurred use of the ACO model amongst private insurers.

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