Accountable Care Organizations Overview
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Accountable Care Organizations Overview



Overview of the concept of Accountable Care Organizations.

Overview of the concept of Accountable Care Organizations.



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    Accountable Care Organizations Overview Accountable Care Organizations Overview Presentation Transcript

    • Accountable Care Organizations
      Charles DeShazer, MD
    • What is an Accountable Care Organization (ACO)?
      An Accountable Care Organization (ACO) is a provider-led organization whose mission is to manage the full continuum of care and to be accountable for the overall costs and quality of care for a defined population. An ACO is a combination of a hospital, primary care physicians and possibly specialists.
      Potential ACOs include:
      Integrated delivery systems
      Physician hospital organizations (PHO)
      Hospital plus multispecialty groups
      Hospital and independent practices
      Three essential characteristics:
      Ability to manage costs and quality for patients across the continuum of care and across different institutional settings
      Capability to prospectively plan budgets and resource needs and distribute payments
      Sufficient size to support comprehensive, valid and reliable performance measurement (estimated to be at least 5,000 Medicare or 15,000 commercial patients)
    • Genesis of the ACO Concept
      Concept began to take shape in 2001 based on work of AMGA to define principles of Accountable Physician Groups
      Council of Accountable Physician Practices (CAPP) formed in 2002 by AMGA
      Vision: to foster the development and recognition of accountable physician practices as a model for transforming the American health care system
      Elliot Fisher
      “Creating Accountable Care Organizations: The Extended Medical Staff”, Health Affairs, 2007,26:w44-w57
      “Fostering Accountable Health Care; Moving Forward in Medicare, Health Affairs, 2009, 28:w219-w231
      Formally proposed and defined in MedPac report to congress in June 2009
      ACO Pilots supported in reform bills
    • Rationale
      2001 IOM Report the “Quality Chasm”
      Working harder will not be able to correct the fundamental deficiencies
      Restructuring is needed to create a system that produces safety, effectiveness, patient-centeredness, timeliness, efficiency, and equityas a reliable property of the system
      Payment reform
      FFS payment structure seen as a one root cause of fragmented, poor quality and low value care delivery
      Capitation and global payment schemes require a certain level of sophistication and integration
      P4P mixed results
      ACO structure considered mechanism to enable transformation of the delivery system
      Strong interest in improving quality and decreasing costs to maximize the value equation
      Many best practice models in terms of value are IDSs (e.g. Kaiser Permanente, Intermountain, Mayo, Cleveland Clinic)
      Need to separate performance risk from insurance risk and place accountability for performance risk where those decisions are made – at the point of care
      Bundled and global payments are a key enabler
      Reduces the need to micromanage the delivery process
      Encourages redesign and innovation to maximize efficiency and performance
      Supports collaboration and integration
    • How is this Different from IDS Strategy of Late 1990’s?
      IDS strategies of late 1990’s
      These were mainly defensive strategies to create leverage with health plans
      IPAs formed primarily to create a contracting structure for greater leverage and control
      Groups formed to be able to take on and manage capitation payments
      Hospitals bought physician practices to create leverage, generate referrals and increase FFS revenue
      There was not much focus on creating a truly integrated system of care capable of taking on performance risk
      Quality measurement was in a nascent stage and there was not much focus on cost efficiency, quality, transparency nor overall performance
      Lack of good risk adjustment methodologies and performance assessment lead to some organizations taking on inappropriate levels of insurance risk
      Very little attention to physician management and productivity dropped in owned practices
      Information Technology in general and EMR technology in particular was immature
      ACOs are designed to take on and manage performance risk
      Goal is to create a structure capable of balancing cost, quality, access and service to optimize care for a defined population across the entire system
      Performance measurement to evaluate the quality of care and to prevent potential overuse (in fee for- service organizations) and underuse (in capitated ones) is a cornerstone of the Accountable Care Organization (ACO) model
      Mature IT today creates the opportunity to wire organizations and create new levels of integration, transparency and performance management
    • Health Plans
      Integrating Care through ACOsACOs can serve as “integrators” that link fragmented entities of the health care system around accountability for value
      Illustrative ACO
      Other Providers Operating Outside the ACO
      Home Health Services
      Mental Health Facility
      PCPs or
      Specialty Group
      Other providers
      Other Providers
      Affordable, safe housing
      Community Services & Supports (e.g., transportation, translation services)
      Employer Initiatives (e.g., smoking cessation, wellness programs)
      Wellness Initiatives
    • What are the Challenges to ACO Development
      The historical lack of collegiality and collaboration between the various organizations, in particular, physicians and hospitals
      The need for strong leadership to address the cultural, legal, and resource-related barriers to creating new provider organizations
      Ensuring a strong primary care base with adequate infrastructure and resources to be accountable for a full scope of responsibilities
      Governance and creating joint accountability
      Determining who will and how to distribute revenue and "shared savings“
      Cultural and workflow shifts necessary to implement more efficient and high-quality models of care delivery
      Holding physicians accountable for productivity, quality and efficiency
      Implementation of necessary infrastructure, especially IT, in a capital constrained environment
      Source: McKethanA, McClellan M. Moving from volume-driven medicine toward accountable care. Health Affairs Blog. August 20, 2009. (Accessed October 26, 2009, at
    • Current Activities
      Early pilots promising; many organizations supportive
      Physician Group Practice demonstration successful
      Congressional Budget Office scored as cost-saving
      Support from key stakeholders has solidified
      ACOs component of reform bills
      May survive politics
      Initiatives at state and local level
      Brookings-Dartmouth supporting pilot development in multiple sites
      Learning collaborative underway with 40+ health systems Massachusetts, Vermont, others moving forward