|
|
|
Accountable Care Organizations |
The impact of the Patient Protection and Affordable Care Act (PPACA) and Accountable Care Organizations (ACOs) could transform healthcare in the same way as initial passage of the Medicare program. While there are few ACOs to serve as models at this point, ACOs have many common features with Physician Hospital Organizations (PHOs), and Independent Practice Associations (IPAs), and other joint contracting organizations.
First Steps: Education
Under PPACA, Accountable Care Organizations can begin to operate on January 1, 2012. Each will be accountable for the quality, cost and overall care of a defined population of at least 5000 Medicare beneficiaries.
If your organization is starting to explore the ACO waters, we offer educational sessions for board, management and physician leadership. These address what ACOs are, their potential impact on the hospital and physician revenue base, the strategic decisions that need to be made, and required investment. We also discuss how ACOs may fit into the organization, preparing you to look at key strategic questions before deciding to move into full ACO development.
ACO Strategy Development
Most ACO projects will start by assessing the Medicare opportunity, as that is the only certain market at this time. Applications are likely to be due early in 2011, so this opportunity requires intensive planning now.
To evaluate launching an ACO, we start with strategic and feasibility analysis. This assures that if and when the organization moves to detailed development planning, it will be a productive investment. Key questions include:
- How much do we have to invest and what kind of risk/return proposition is acceptable?
- What shared savings can we expect to receive, and when?
- How would we divide shared savings between the hospital, physicians, and others?
- How will this effort to manage care affect our volumes and revenues, and what can we do to make up for any declines?
- Which physicians, particularly PCPs, will be involved?
- Should we pursue markets beyond Medicare? Which ones?
- If we don’t create an ACO, who will, and what impact might it have on us?
Pursuing a Medicare ACO can also lend critical mass to a broader transformation of care delivery, which can create opportunities for contracting with health plans or self-insured employers. DGA understands this broader context for the ACO opportunity.
Assess Organizational Readiness
Many organizations have PHOs or other organizational structures that can support ACO development. The first step in ACO planning is to assess how the organization’s existing capabilities relate to the organizational and care management requirements for an ACO.
Planning for Operational and Financial Development
Once you have made the decision to move ahead, detailed preparation will include:
- Developing an organizational structure: What will the ACO look like? Who will control it and who will participate?
- Planning for operations: How will care be managed and evidence-based medicine be integrated into care management? How will physicians be engaged in improving the care delivery process? How will patients be engaged and patient-centeredness be assured? What administrative systems are required? How will IT support care management? What reporting is necessary to meet CMS requirements?
- Financial structure and modeling: What impact will the ACO have on the hospital and physicians? What will the operating budget look like? What savings can be projected? What approach will be used to distribute shared savings?
DGA Partners has been active in developing what are now some of the more mature and successful payer and risk-contracting organizations. This experience positions us well to assist hospitals and health systems in understanding the opportunity and challenges presented by ACOs.
|
|
“As a result of DGA's work on sizing our ACO opportunity and assessing its strategic fit, hospital leadership chose to move forward with detailed planning.”
Cliff Frank, CEO
Vermont Managed Care (Fletcher Allen Health Care)
Burlington, VT
“DGA's retreat provided expert perspective on ACOs, preparing our physician leaders and board to design and plan our ACO.”
Vickie Diamond, CEO
Wyoming Medical Center
Casper, WY
“DGA explained the ACO opportunity, and how it fit with our capabilities and future market position. Our physician leaders are excited about the opportunity to develop an ACO, and we are moving forward with detailed planning.”
Greg Gieseman, CEO
Select Health Network
South Bend, IN
More from DGA on this topic
|
