Accountable Care Organization (ACO)

           Accountable Care Organization (ACO)

An Accountable Care Organization (ACO) consists of a group of practices, doctors, insurance companies as well as hospitals that share medical and financial obligations, with physicians being the prerequisite of the program. The program was established by the Centers for Medicare and Medicaid Services (CMS) in 2010 with specific set standards for maintaining the health of patients and keeping them out of the hospital that must be met by an ACO (“Accountable Care Organizations | Medicare”, 2020). Sharing financial and medical roles is established by providing care that is coordinated, with the aim of ensuring patients receive the appropriate care at the right time, eliminating medical errors and avoidance of unnecessary repetition of services. For providers of medical services to benefit from the program, ACOs must be able to reduce procedures, hospital stays and visits that are unnecessary while providing quality patient care.

There are different types of Medicare ACOs, and these include Medicare Shared Savings Program (MSSP) ACOs, Next Generation ACOs and ACO Investment Model (AIM) (McWilliams et al., 2016). MSSP is a permanent program that offers financial incentives for achieving or exceeding savings standards.  The Next Generation Program has multiple payment structures. Rewards and increasing financial risk levels act as an incentive for reduced costs and high quality of services. As a subset of MSSP, AIM enables upfront as well as monthly pre-payments as a way of assessing an increase in investments by smaller or rural providers. Adena Pike Medical Center is an example of a hospital that offers services under Medicare cover (www.dynamit.com, 2020). The hospital is rated five stars by CMS. It specializes in primary medical care to patients of all ages and is a critical access hospital. Physicians collaborating with the hospital practice family medicine, emergency medicine and pediatrics. All these are offered under Medicare insurance. Adena Pike Medical Center would join an ACO due to the shift in the medical industry payment system, from the traditional fee-for-service payments to payments based on value.

To join an ACO, providers are required to make an investment in hardware and software that support Electronic Health Records (EHRs) if they do not have them. Moreover, they are required to train their staff to use the technology for managing the care of patients efficiently. A Health Information Exchange (HIE) is also necessary as a channel of sharing information with other providers. Participants of ACOs join the programs for several reasons. ACOs enable their participants to significantly reduce costs by incentivizing physicians to maintain their patients’ good health, avoid hospitalization, tests and emergency room visits that are unnecessary. When physicians reduce costs, they earn bonuses. ACOs offer strategic partnerships with other caregivers that reduce risks through sharing of losses, improve health outcomes of patients through collaborations and extended networks. Due to the set standards, patients receive better care; hence providers have higher patient acquisition and retention rates. By partnering with other physicians, healthcare systems, practices and hospitals, providers gain access to technology that is advanced, a task that would have been difficult due to financial constraints,

Several vital benefits accrue to providers and patients when a medical organization joins an ACO. Being a member of ACO aid in improving the functionality and profitability of services, at the same time, increasing the wellbeing and satisfaction of patients. When a small practice joins an ACO with a well-financed partner such as a large hospital, they will receive help through funds or supply of EHRs, care coordinators and resources that will improve the quality of their services (McWilliams et al., 2016). The aim of an ACO is provider coordination, and when an ACO achieves that by meeting its quality standards and providing care within the pre-specified budget, service providers will be able to make more money.

Despite their benefits, there are challenges faced by members of ACOS. Members may experience lower rates of reimbursement based on the value care model in relation to the traditional fee for service payment that offered more compensation and incentives to physicians to advise more tests and diagnostic procedures.

ACOs are proliferating the health care industry, a massive step to offering a more efficient health care system in America. It enables practices and physicians to be more efficient in their operations and have a share in the cost savings. This is achieved while saving the time patients spend in hospitals, money and effort that would have otherwise been wasted on visits that are unnecessary. Moreover, the set standards ensure patients are getting the best quality healthcare services.

References

Accountable Care Organizations | Medicare. Medicare.gov. (2020). Retrieved 16 March 2020, from https://www.medicare.gov/manage-your-health/coordinating-your-care/accountable-care-organizations.

McWilliams, J. M., Hatfield, L. A., Chernew, M. E., Landon, B. E., & Schwartz, A. L. (2016). Early performance of accountable care organizations in Medicare. New England Journal of Medicine, 374(24), 2357-2366.

www.dynamit.com, D. (2020). Accepted Insurance At Adena Health System. Adena.org. Retrieved 16 March 2020, from https://www.adena.org/inside/page.dT/amg-insurance.