The ACO Advantage

The passage of the Patient Protection and Affordable Care Act triggered enormous change across the health care industry. Chief among them is the ongoing drive to reduce waste and unnecessary costs. The accountable care organization (ACO) was conceived to do just that.

In the public sector, the Federal Government has set up a special payment benefit for certified Medicare ACOs. In the commercial market, providers (or provider organizations) have created private ACOs on their own or in concert with insurers.

ACOs Defined

Simply defined, an ACO is a group of doctors, hospitals, and other providers that agree to be accountable for the quality, cost, and overall health of a set of patients by coordinating efforts across the care continuum. Operated correctly, ACOs benefit all constituencies of the health care industry—payers, providers, and patients.

Payers quite naturally are looking for ways to pay less for health care. By choosing an ACO, employers or insurers are able to align themselves with a ready-made system of providers who are incented to improve patient health, enrich the patient experience, and bring down the total cost of care. While payment methods may vary, payers typically share in the savings generated by the ACO. With advanced data tracking in place, payers are also able to view population health trends for their population as well as cost histories, allowing for ACOs and payers to make performance adjustments along the way based on those insights.

For providers, the business of medicine is becoming more business and less medicine. By aligning with an ACO, physicians or other advanced practitioners are able to transfer much of their administrative responsibilities and focus more on their medical ones. By following a common care approach and aligned practice structure, providers are able to streamline their practice while helping to improve patient health. Providers also appreciate being part of a culture featuring physician leadership, a team-based approach, continual focus on patient value, and shared financial risk.

Patients also benefit. Through an ACO, patient care is coordinated across all medical disciplines from obstetrics to geriatrics. Patients have a large choice of providers from which to choose, from primary care physicians to cardiac surgeons to home health providers. Every doctor across a patient’s health continuum has a view into that patient’s history and care is coordinated based upon proven, effective courses of action. Quality of care increases, duplication of efforts is mitigated, and overall patient health care improves.