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What you need to know before starting or joining an accountable care organization

Decisions that are made without proper deliberation could turn out to be costly.

John Andrews, Contributor

Before committing to partnerships within a parochial healthcare network, all the players must know the stakes, the options available and most importantly, the methodology for proceeding with a business model that is foreign to most provider organizations.Before committing to partnerships within a parochial healthcare network, all the players must know the stakes, the options available and most importantly, the methodology for proceeding with a business model that is foreign to most provider organizations.

Forming an accountable care organization must not be a hasty decision. Before committing to partnerships within a parochial healthcare network, all the players must know the stakes, the options available and most importantly, the methodology for proceeding with a business model that is foreign to most provider organizations.

Otherwise, experts say, decisions that are made without proper deliberation could turn out to be costly in more ways than one.

Conceptually, providers should be looking at developing a clinically integrated network between health systems and physicians, while contemplating how to take risk, said Bob Williams, MD, director with New York-based Deloitte Consulting.

"The most important thing for those exploring ACOs is to know their own market and look for an appropriate population to assume risk for," he said. "There are a couple areas they should consider – self-insured employees or a health plan that wants to share risk. They need to be discreet, understand the clinical and financial opportunities for improvement and secure an adequate network of physicians to drive that care. It takes a village to do this work."

The coordination facet of ACOs spreads from clinical practice to actuarial processes to data management to population health; these are the foundational capabilities that need to be brought together, Williams said.

"Early on, look at the payment model and how the funds flow," he said. "If you are receiving money for that risk, how will you share it? Make it clear upfront."

Williams also recommends setting up a three-year strategic roadmap -- that way the health system can communicate its direction to physicians and community providers.

"Physicians and administrators with their heads down on fee-for-service need to know that the times they are a changin'," he said.

Critical competencies

David Burton, MD, senior vice president of Salt Lake City, Utah-based Health Catalyst, has extensively researched ACOs, writing a white paper and lecturing widely on the topic. He has compiled a detailed list for ACO readiness, which begins with the critical competencies of infrastructure, registries, analytics platform and prioritization.

In assembling a coherent infrastructure, providers must put together a transparent, integrated system from the disparate systems that exist throughout the continuum.

"The days of cobbling together a bunch of solutions are gone," he said. "You must be able to integrate your data and it has to be flexible, not vertical."

[Also: Walgreens cuts ties with two ACOs]

Registries are next so that the work processes can be properly assigned within the system, he said. Because healthcare consists of thousands of work processes, they must be broken down to a manageable number. For instance, if there are 400 work processes for physicians, focusing on 10 percent – or 40 – is a good start.

"The purpose of registries is that it gives you the ability to prioritize," Burton said. "You need to map and master these. That will help you focus on the right things and assign the right priorities."

Several other items round out Burton's ACO preparation checklist, including network optimization, at-risk contracting assessment, administrative services and outcomes improvement for patients, populations and operations.

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Going through the checklist is akin to working your way up a fruit tree, Burton says, starting with the low-hanging fruit at the bottom and climbing up to the top. In ascending the ACO tree, he says the decisions get more complex and challenging.

Overall, he says there are three things to keep in mind: "The kind of care that is assigned to individuals in the population, the site where that care will be provided and doing the right thing by everyone," he said.

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