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ACOs: Is Technology the Solution or the Struggle?

Author: Kovida Rao is a pre-med senior at the University of Michigan-Dearborn, HIMSS Summer 2013 Intern, and member of the HIMSS Accountable Care Task Force

Over the past five year, the health care sector has some significant federal program experience with the idea of accountable care from the Medicare Hospital Gainsharing Program (2008-2011) to the Accountable Care Organization (ACO) programs authorized under the HITECH Act (2012-ongoing).  While it is no longer a novel idea, it still is one that deserves the spotlight.

ACOs are groups of doctors, hospitals, and other health care providers who come together voluntarily to provide coordinated, high quality care to their patients.  While there are different types of publically funded ACOs (PioneerMedicare Shared Savings Program(MSSP), and Advanced Payment Model), the MSSP ACO seem to be making the most headway.

The premise of an ACO is to encourage healthcare providers to think of themselves as a cooperative group sharing patient care as well as financial incentives. The healthcare reform law makes available the option for healthcare providers to form an MSSP ACO and provides some flexibly on how an ACO can be organized, but all must include primary care providers and serve at least 5,000 Medicare beneficiaries and agree to participate in the program for a minimum of three years. Financially, its providers share in any cost savings that arise from quality improvements and enhanced efficiency.   If cost loss is experienced, MSSP ACOs must share in this as well.

The incentive plan for an ACO can be boiled down to a simple concept:  if the ACO is able to reduce care costs less than Medicare’s current expected cost for the patient, then the ACO will receive a share of the savings as a bonus payment. Conversely, the plan also includes a financial penalty if an ACO misses its goal and incurs costs above the status quo.

MSSPs are required to outline how the plan expects to use the returned savings. While some have other ideas, one that consistently made an appearance my research was the idea of reinvesting in the ACO’s data and IT infrastructure.

Is Technology the Solution or the Struggle?

A recent article published by Healthcare IT News stated ACOs lack clinical analytics to manage the explosion of patient data. While ACOs are attempting to use new technology in their models, a recent survey indicates that they question clinical and financial efficacy of remote patient monitoring (RPM) technology, as well as struggle with clinical integration across systems.

ACOs are trying to move forward with technology. For example, the Beth Israel Deaconess Physicians Organization (BIDPO) Board of Directors mandated that every BIDPO practice have a certified electronic health record (EHR) system in use by December 2010 as a condition of participation in payer contracting efforts.

Most ACOs use their EHR systems and health information exchange to report on progress in meeting quality measures.  Similarly, clinical data analytics identifies areas that need to be improved in quality outcomes, resource consumption, and high-need patients. For example, using predictive modeling, population health registries, and advanced algorithms is useful in uncovering clinical gaps in care.


Reinvesting in the ACO is the best idea, but knowing where to invest and how much is key.  According to my research, there are five essential areas on which ACOs should focus their efforts:

  1. universal adoption of EHRs,
  2. healthcare information exchanges,
  3. business intelligence and analytics,
  4. universal availability of personal health records, and
  5. decision support services.

Deloitte suggests four critical success factors for measuring competency in infrastructure and IT:

  1. Ability to build and make effective use of information technologies for health care delivery and administration at provider, patient and system level
  2. Ability to integrate systems and aggregate data across multiple sites of care
  3. Ability to synthesize data into dashboards for management decision-making
  4. Ability to leverage IT infrastructure to reduce paperwork and workflow inefficiency

In addition, The Premier Research Institute just published a white paper which analyzes four Pioneer ACOs and their journeys to become accountable care organizations. According to the report, the major IT adjustment ACOs can make within their organization is to switch completely to EHRs, which will enable faster, easier, and more accurate reporting.

What’s Next?

Access to information systems, medical management protocols and procedures for monitoring patient adherence, contracting with health plans and employers, collection and distribution of dollars, and compliance with regulatory requirements at the state and federal levels requires capabilities not usually resident in a provider organization. Clearly, the costs and effort associated with these activities are substantial; therefore, having knowledgeable managers with relevant experience will be important to effectively implementing ACOs.

Historically, provider organizations have struggled to manage financial risk from employers and health plans, preferring bonus arrangements that do not have a substantial downside risk. The maturation of the ACO model will necessarily require increased willingness to accept substantial risk and effectively manage costs, outcomes and compliance – all of which should be seamless to patients, efficient for payers, and strongly supported by provider participants.

While all new initiatives run into problems, the only way to solve these problems is to wait and see. The Centers for Medicare and Medicaid Services (CMS) will have to wait for the Performance Numbers to be available in order to assess how well the program is running.

So in the end, the consensus is: it’s only a matter of time. But what do you think? Will ACOs become the new “go-to” model?
Additional Readings:

Health Affairs, Health Policy Briefs: Next Steps for ACOs (January 2012)

Health Affairs: How The Center For Medicare And Medicaid Innovation Should Test Accountable Care Organizations (August 2013)

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