Is It Profitable to be an Accountable Care Organization?

Posted onCategoriesMedical

An Accountable Care Organization (ACO) is a healthcare system that provides complete, all-around coverage to its patients. An ACO works across different departments to provide the most extensive and efficient care to the members of its network. They cover all specialties, which all fall under the same organization and work with the same non-healthcare departments, such as accounting, legal, human resources, etc. An ACO is a full system of care for its clients.

image courtesy of freedigitalphotos.net/photostock
image courtesy of freedigitalphotos.net/photostock

Rather than a client going to a primary care physician, who might then recommend they go to a specialist in a whole other practice, that specialist would work together with the primary care physician, under the umbrella of the same organization. This alleviates the potential for errors and higher costs when insurance won’t pay for out-of-network providers.

The different departments and specialists work together to provide the most complete, non-duplicative and efficient care. When all the doctors, nurses and specialists who are working on the same patient communicate with each other, the organization as a whole eliminates a lot of wasted time, wasted money, wasted resources, and waste in general. It is a way to give patients the best care, at the lowest cost.

With an ACO, this is done for every patient enrolled with the organization. It promotes teamwork across departments, and encourages healthcare organizations to give patients the best possible care.

While it seems like a no-brainer to be an ACO, starting one up can be a bit costly and burdensome for a new or small organization, at least in terms of profit. In the long run, operating as an ACO should save an organization money. Be aware that it will take time to get it running due to the fact that implementation isn’t simply loading a program on the system for everyone to follow.

ACOs fees are based on the care given, not based on each service performed. This is a newer trend in the healthcare industry and one that most organizations will be following sooner rather than later. The change in the way fee are expensed places more risk in the hands of the health experts, but provides a more streamlined path for care.

image courtesy of flickr.com/KoolCatsPhotography
image courtesy of flickr.com/KoolCatsPhotography

This is not as big an issue for large organizations with many patients, as their cost savings versus what they lose by not being fee-for-service should even out. On the other hand, for smaller organizations, this is a hard thing to implement because by not charging for each service, they may be losing enough money that it’ll be hard to be profitable in the beginning. While that may not be beneficiary for the small healthcare organization, this type of organization and pay model would almost always benefit the patient. The patient is only paying for his or her care, not for each treatment.

In the end, the ACO model is a good one to strive for, and one that the Affordable Care Act has fully backed, and even provides incentives for. Hopefully with the help of the government, even smaller organizations can adopt this sort of care for their patients.

Bird’s Eye View of How Population Health Management Helps an ACO

In the healthcare industry, demands for better services at lower costs are at the forefront of many conversations both within and without the walls. Many of the mandates that government sets forth also stipulate this. How are organizations supposed to make changes to a business that is dealing with accidents and ailments that have their own unique circumstances? There is a particular tool that these groups now have at their disposal, which provides a better understanding of the community where they are located and the needs of the people found within; this is Population Health Management software. Healthcare providers can make data-driven decisions, plan for the future and improve care all while containing costs.

image courtesy of flickr.com/AnswergenSengen
image courtesy of flickr.com/AnswergenSengen

Population Health Management is defined as the outcomes and distribution of healthcare within a specified group. These groups may be as large as a nation, or a particular community; they may be more exact by selecting persons with disabilities or financial difficulties. However, when a healthcare organization is providing services in a defined area, they want to know the types of services that are most needed, where are the best locations for hospitals and clinics to serve the most number of patients, and where specialty treatments physicians would most conveniently located.

The task of tracking down all this kind of information, creating a report that details the population that is being helped, and doing it in a timely manner is almost impossible. Educated guesses are still just based on making a decision without all the information in hand. This is where and why Population Health Management (PHM) software is crucial in changing decisions from guesses to fact-based and data-driven.

We all participate in adding information to healthcare data systems every time we visit the doctor or end up in the hospital; statistics and notes go into our electronic health record (EHR), which enables the treating expert to know our health history and to add to it. This health information is not only collected for our own personal benefit, but is pulled out and used to understand everyone around us. In other words, when you get the flu and end up in the doctor’s office, information is saved and analytics applied to bring to light health patterns in your area. With a picture of patterns that have occurred over years, and your input, it is easy for decision makers within a healthcare organization to predict when cold and flu season will probably start next year. This is a small example, but the ability to prepare, yet not over prepare, aids in the effort to provide better care and not have waste or overages on the financial side.

The predictive and preparative knowledge gained by understanding and applying population health management strategies also has an effect on managing patients’ risks and reducing negative consequences. As seen in this Becker’s Hospital Review article, PHM turns previously time consuming tasks into much more time sensitive reports and data, which translate directly into effective and efficient care.

PHM isn’t simply loaded onto a bunch of computers and it is ready to use. There is a lot of time, changes and other investments that are required to implement the system. With as much data that is being created and saved, the need for an Enterprise Data Warehouse (EDW) is a must. Along with knowing that implementation isn’t a series of single projects that once completed provide a new, self-contained system. Part of this is due to the fact that every organization has different requirements and unique obligations that must be met. These must be understood so as to integrate them into the system as a whole, and ultimately reach a point where efficiencies are more the norm.

image courtesy of flickr.com/NicoTrinkhaus
image courtesy of flickr.com/NicoTrinkhaus

Truly, it is quite amazing that each one of us is contributing to a huge picture that improves health services down the road. We all live as part of a community and many of the regularities found within communities are repeated. These repeats of patterns and the understanding of how to prevent, prepare and predict health issues is exactly what Population Health Management is all about.