Home » Readers Write » Currently Reading:

Readers Write: ACO, Heal Thyself

July 18, 2016 Readers Write 3 Comments

ACO, Heal Thyself
By Stuart Hochron, MD, JD


I was recently asked to comment on the success (or lack thereof) of Accountable Care Organizations (ACO) and why I thought ACOs haven’t lived up to expectations and what additional incentives will be required for them to be successful – if, indeed, they ever will be.

The questions gave me pause. Certainly ACO performance to date has left much room for improvement. According to an analysis published by the Healthcare Financial Management Association, just over a quarter of ACOs were able to generate savings in an amount sufficient to make them eligible to receive a share of those savings.

But the implication that ACOs are biding their time until new incentives or perhaps a new business model emerges is alarming. This is not a situation where good things will necessarily come to those who wait.

I work with a number of ACOs, hospitals, and physician organizations. While I am not at liberty to share their financial performance data, I’ve distilled what I believe to be the best practices employed by those that will be successful.

It takes a platform

Fundamentally, ACOs require wide-scale patient-centric collaboration – that’s what underpins the hopes of achieving more-efficient, more-effective, less-wasteful, non-redundant care. But collaboration doesn’t just happen automatically, even when everyone on the team works in the same building. And for ACOs, comprised of multiple entities that don’t necessarily have any prior joint operating experience or relationship of any kind, the challenge is greater still.

Based on extensive discussions with healthcare executives and real-world performance analysis, it is clear that successful ACOs must make an investment in robust groupware tools, the kind that professional services organizations have had in place for decades to ensure that members of a distributed workforce can collaborate and coordinate as easily as if they were in next-door offices.

In the healthcare context, these tools will facilitate everything from patient scheduling to real-time sharing of PHI to charge capture and invoicing. Far beyond secure messaging, such platforms underpin the ACO’s activities, giving providers a common workspace for all manner of collaboration and ensuring that all providers across the care continuum are aware of and working towards a single set of organizational imperatives. The ACOs that don’t invest in the transformation – that try to piggyback on existing infrastructure – will ultimately find that their people don’t make the transformation either.

Patients at the center

All healthcare systems need to become more patient-centric and this is particularly true of ACOs, whose compensation, of course, is based on how successfully they treat (and, ideally, reduce the need to treat) patients. Thus, successful ACOs will make patient-centric collaboration and communication the centerpiece of an organization-wide operating system. 

Ideally, collaboration and communication won’t stop there. ACOs will implement population health initiatives by empowering patients, giving them the ability to take a more active role in keeping themselves healthy. This will be accomplished via tools such as mobile apps that enable people to access care services before they get sick and enable ACOs to reach out to the community, helping guide patients towards good lifestyle choices and, if they have received acute treatment, helping patients follow post-discharge instructions. So that same collaboration platform that will help care professionals work together better – it will need to extend seamlessly into the community as well.

Without aligned physicians, there’s no accountability

Technically, any organization that agrees to be “accountable for the quality, cost, and overall care of Medicare beneficiaries” can qualify under the definition of an ACO. But what all successful ACOs will have in common is tight alignment of physicians and care teams. I don’t simply mean financial alignment. Theoretically, all the physicians in an ACO are financially aligned. Nor do I just mean alignment around a patient.

True alignment means the physicians who form the core of the ACO understand the goals and priorities of the organization and feel invested in its success. Physicians make dozens of care decisions every day. They need to be making those decisions against the backdrop of the stated policies of the ACO. That requires being literally as well as figuratively connected to the organization, receiving regular communications such as educational materials, opinion, and thought leadership, being part of the daily give and take.

The financial incentives and disincentives under which ACOs operate change regularly, meaning the ACO’s organizational goals are updated all the time. The challenge is for providers to understand those incentives fully and to be able to adjust their practice methodologies and for that to happen on an organization-wide basis. Achieving and maintaining alignment requires an institution-wide collaboration platform. In a distributed entity such as an ACO, there’s no physician’s lounge. But with modern groupware, we can simulate one in a virtual environment and realize the same benefits.

Networks don’t build themselves

In my work with ACOs, one hurdle encountered by all is introducing and socializing the concept that the ACO establishes a new network of providers to which to refer cases. Intellectually it isn’t that hard to grasp. But as far as changing ingrained habits, that is much more of a challenge – not least because providers have no way of knowing which other providers are also members of the ACO, nor how effective any of those providers might be as physicians contributing to the stated financial goals (savings as well as revenues) of the ACO.

The only way to keep referrals within the organization – to combat the challenge of referral leakage, which will sink an otherwise effective ACO – is the ensure that every physician in the ACO is connected to a physician referral directory that lists all providers by specialty.For good measure, it will include a rating quantifying each provider’s service.

Improving clinical documentation

In the minutely quantified world of ACO financial performance, every dollar counts. The ACO’s income is based, in part, on costs saved, along with other metrics. As is well known, incomplete clinical documentation leads to tens of billions of dollars in disallowed reimbursements every year, a situation that only grows worse in a distributed organization such as an ACO. 

While we are imagining the infrastructure of the successful ACO of the future, let’s not neglect to include capabilities for crisply identifying and documenting treatments and procedures and thus enabling the medical billing professionals – who may have no physical or organizational connection to the care delivery professionals – to complete the paperwork correctly and maximize reimbursement revenue.

Conceptually, ACOs are the heart of the Affordable Care Act. Accountability – enforced by incentives and penalties – is central to our concept of how healthcare ought to work. If ACOs aren’t delivering on their promise, then that has ominous implications for the healthcare system overall. With the right communications infrastructure used as directed, ACOs can lead the way to the bright healthcare future we all want. Rather than stand on the sidelines as spectators, waiting for new incentives to come down from on high, ACOs can and must take action now.

Stuart Hochron, MD, JD is the chief medical officer of Uniphy Health of Minneapolis, MN.

HIStalk Featured Sponsors


Currently there are "3 comments" on this Article:

  1. In your commentary, you wrote that you were asked to comment on the success of ACOs and did a nice job mentioning the financial aspect and risk sharing components. However, I didn’t see your opinion if quality of care delivered is improving due to ACO organizations. CMS seems to feel that it is because the 33 quality metrics ACOs report against are improving year-over-year. However, other academic literature is less convincing and has even suggested that in early years, Pioneer and MSSP ACOs didn’t perform as well as non-ACOs. What is your take on quality delivered by ACOs as a degree of success with the program? One could assume that greater quality could result in greater savings, but I don’t think we have established that relationship yet. What do you think?

  2. Quality is difficult to define and measure and, you are correct, the overall relationship between higher quality and cost savings has not been proven. The best we can do today in terms of defining and measuring quality is to define and measure “quality metrics”. A more complete definition of quality will need to wait for big data analyses of a much wider range of patient-centric outcomes. That being said, I believe that the processes and technologies available today, if properly chosen and implemented, are more than adequate to achieve compliance with current quality metrics. And ACOs are as capable as non-ACOs of achieving high quality metrics. Doing so on a tight budget, however, requires a high degree of real-time coordination among case managers and care teams that can only be achieved with the help of innovative technology. Some teams seem to get it right while others lag behind. In my experience those who succeed have a greater willingness to innovate compared with those who do not. I hope this has been helpful. Please let me know what you think.

  3. I love to hear that you feel that success can only be achieved with with the help of innovative technology playing in concert with real-time coordination and communicating care teams. I think it is easy to get discouraged that innovation is playing a significant role with the scarce number of ACOs willing to accept two-sided risk and higher savings. One-sided risk contracts seem to be a way to play the game without really needing to innovate (in my opinion). Until you really put your cards on the table and say, “We can do it better by doing it differently”, I don’t think there is a urgency to innovate. However, I do understand that ultimately the worst way an ACO can serve a community is by going under, I would love to see a significant number of two-sided risk contracts with ACOs using tele-ICU or telehelth for case management (as the VA is testing) or any other innovative way to deliver high touch, lower cost, higher efficiency chronic case management / case management techniques to be able to reap the benefits of the shared savings possible in those contracts. Do you think that CMS reimbursing non-in-person communication and care will play a role? I hope that it does and helps drive higher efficiency patient interactions as long as there isn’t a loss of quality.

Text Ads

Recent Comments

  1. Looks like the House rep for Spokane and one of the Senators from Washington State are engaged: https://mcmorris.house.gov/posts/mcmorris-rodgers-blasts-va-cerner-for-patient-harm-at-spokane-va https://www.murray.senate.gov/murray-mcmorris-rodgers-secure-va-commitment-to-hold-town-halls-for-veterans-in-eastern-washington/ That…

  2. The thing I'm focusing on are the department(s) these have hit: Marketing & Customer Experience. The database community has believed…

  3. How Cerner fumbles VA and rolls out at DHA without issue, and Congress to my knowledge doesn't as why, so…

  4. Yikes. Oracle/Cerner just can't get the break on this one. Mr. H, could you please run a poll on how…

  5. That BH ER experience matches mine even years before the pandemic - went in with a suicidal friend, and they…


Founding Sponsors


Platinum Sponsors






















































Gold Sponsors