According to a report published in 2011 by the Commonwealth Fund Commission on a High Performance Health System, if implemented properly, Accountable Care Organizations will not only provide better quality of healthcare but would also bring down the cost of healthcare. The Centers of Medicare and Medicaid Services (CMS) predict that if the rising healthcare costs are left unchecked, healthcare costs might touch 19.3% of the GDP of the US by 2019. The CMS continues to discuss Accountable Care Organizations (ACOs) present an effective way to meet the challenge of achieving quality healthcare, along with cost-effective modules.

Seven Capabilities ACO’s Must Possess

Accountable Care Organizations are a great way to integrate local physicians with other entities of the healthcare system to share practices and improve the overall condition of healthcare. ACOs get rewarded for controlling costs, while simultaneously improving the quality of healthcare. The biggest strength of ACOs lies in their flexibility, innovation, knowledge base, risk assumption, and structure. Any organization desiring to be an ACO must fulfill seven requirements:

1.    Processes that define coordinated care, and work toward improving the quality of healthcare and reducing the cost associated with it.
2.    Effective leadership structure for decision making.
3.    Stable legal structure, responsible for receiving and distributing bonuses to participating providers.
4.    Handle the PCPs of at least 5,000 Medicare beneficiaries.
5.    Participate for a minimum of three years.
6.    Have contracts with specialist physicians and doctors.
7.    Provide the CMS with the list of PCPs and healthcare specialists.

The 2010 Patient Protection and Affordable Healthcare Act proposes a pilot ACO program to be implemented in 2012. Although only Medicare beneficiaries are included in the pilot program, the widespread implementation of the ACO program would occur after the successful implementation of this pilot process.

Building Blocks an ACO Needs to Form

The ability to deliver effective and efficient quality of healthcare across different sections forms the basis for any ACO. However, achieving and implementing the same not only involves risk and cost analysis, it also requires the use of clinical integration tools to help with quality improvement. The building blocks that define the structure that an ACO needs to form to deliver on the aspects of quality and costs include:

•    Predictive modeling: Organizations must use predictive modeling to identify high risk patients for disease management. Predictive modeling allows clients to stratify their population with respect to risk for hospitalization.
•    Clinical integration tools: These tools play an important role in ensuring that consistent protocols are followed across networks, which provides better sharing of practices and achieving measurable quality. These tools help in measuring the physician’s and network’s progress in achieving the targets.
•    Financial risk planning: The success of any Accountable Care Organization depends on its ability to manage risk. To manage financial risks, organizations would need technical infrastructure to manage the quality and cost of healthcare provided. You need to track performance of physicians against financial budgets and goals, and identify patients with gaps in care.
•    Establish registries: With vast amounts of clinical data in each patient record, coupled with the complexity of managing numerous records, there needs to be a mechanism in place that actively manages patient population. The system should help in tracking individual patients and providing access to micro data based on events and lab results. This feature not only helps in improving compliance with clinical best practices but also helps achieve pay for performance goals.

These are the basic blocks that every organization needs to put in place to provide coordinated and aligned care to patients and add value to patients, providers and payers alike. Forming these blocks would lead to better outcomes for patients and reduce the overall healthcare costs drastically.