The document discusses Accountable Care Organizations (ACOs) which were created by the Affordable Care Act to improve quality and lower costs. It provides frequently asked questions about ACOs, including whether they are viable, how providers can save money through ACOs, examples of successful ACO programs like Marshfield Clinic, and the healthcare IT components needed to support ACOs. Providers are encouraged to invest in quality, innovation, and data/analytics to prepare for value-based payment models like ACOs.

1. Frequently Asked Questions about Accountable Care Organizations
The Patient Protection and Affordable Care Act (PPACA) of 2010 directs the Centers for
Medicare and Medicaid Services (CMS) to create a national voluntary program for Accountable
Care Organizations (ACOs) by January 2012. CMS released the guidelines for creating an ACO
in late October, 2011, and now healthcare executives are tasked with assessing whether to
move their organization towards a shared savings program. Following are the frequently asked
questions about ACOs.
1. Are ACO’s DOA (Dead on Arrival)?
―ACOs are key to the healthcare overhaul,‖ says CMS Director Don Berwick, MD. Their
purpose is to foster change in patient care to accelerate progress toward a three-part
goal: 1) better care for individuals, 2) better health for populations and 3) slower
growth in costs due to improvements in care. While very few providers disagree with
the intent of these goals, there is much discussion around how ACOs will be
implemented, their cost and if in fact they will succeed.
―ACO’s are about fundamental changes,‖ said former CMS administrator Mark
McClellan, MD. ―The main emphasis is to get away from fee for service payment
structures.‖ While CMS has received considerable pushback from providers about its
notice of proposed rulemaking for ACO’s, McClellan says, ―they are not going away.‖
2. Is there really any money to be made in ACOs?
Part of the theory behind accountable care and outcomes-based payment reform is
centered on statistics like these:
a. Almost 50% of healthcare spending in the United States is for the care of 5%
of the population (National Institute for Healthcare Management
Foundation, July 2011)
b. Nearly 50% of the $1.13 trillion in healthcare spending in the United States
is for the treatment of chronic conditions. (AHRQ research activities, July
2011)
Theoretically, there is a great opportunity for shared savings if providers are incented
for and improve their management of chronic disease. In addition, there are
opportunities for cost savings with better management of the 5% who consume most of
the cost.
In order to do so, providers will need access to the same logic that payers use to
identify the patients who are likely to require the most care and then help them

2. better manage those patients. Improving quality and access to preventative care will
also create more value.
3. How did Marshfield Clinic save Medicare $83 million over 4 years?
Marshfield Clinic is one of 10 participating practices in a demonstration project run by
CMS that is a precursor to the ACO project. Marshfield has been able to consistently
improve the quality of healthcare it delivers to patients while reducing healthcare
costs. ―The clinic is receiving a bonus payment of about $16.15 million this year which
will be used to fund further changes and improvements in how we deliver care to all of
our patients,‖ said Theodore Praxel, MD, Medical Director, Marshfield Clinic. The clinic
identified 6 key elements that have contributed to their success and their savings:
a. A well-developed Electronic Health Record (EHR) that gives access to all
physicians and tracks labs, visits and appropriate monitoring of chronic
conditions
b. A 24/7 telephone nurse line for advice and triage
c. Anticoagulation clinic
d. Congestive heart failure clinic
e. Cholesterol management programs
f. Telemedicine initiative
4. What are some of the important Healthcare Information Technology (HIT)
components needed for accountable care and outcomes-based payment reform?
There is little doubt that HIT and EHRs will play an essential role in ACO success. Here
are some of the key areas that HIT will address:
a. Financial infrastructure – ability to accept, track and allocate payments
associated with performance results
b. Reporting infrastructure – system to share performance data with physicians,
payer and relevant stakeholders
c. Performance management – dynamic scorecards, dashboards, summary and
detail reports supported by proactive alerts
d. Data aggregation – meaningful joining of data from hospitals, payers and
physicians for an overall view of a population’s care
e. Clinical data exchange – compilation and sharing of patient-specific data to
aid in diagnosis and treatment
f. Role-based security – secure online environment, which allows for
controlled access to shared data
5. What should providers be doing now?
Now that the final rule has been released, providers must decide quickly if they are
going to be ready to apply for the CMS Shared savings program by no later than July 1,
2012. Providers should consider whether they have a culture of quality and innovation.
They need to review their IT strategy to see if they are able to create the types of
reports that will enable population health management and quality data aggregation.

3. Investment in these areas will prepare any size or type of healthcare organization for
success in the upcoming era of value-based payment reform.
6. Why Dell Services?
Research has shown that the key to successful ACO-like programs is a culture based on
quality and innovation and a robust data environment that provides financial and
clinical analytics as close as possible to the point of care.
The Dell Healthcare Services team supports nearly every large Electronic Medical
Record vendor and more than 1,000 hospitals with standard and custom IT solutions.
Our team can help build the integration and analytical platform you will need to
successfully manage the ACO. Our extensive experience with all the major healthcare
information systems can help you accomplish this in the most cost-effective manner—
using the best tools available in the market—employing both short-term and long-term
resolution services.
For more information about this or any of our service offerings, please email
Betsy_Block@dell.com or visit dell.com/healthcareconsulting.
Betsy Block is the director of Dell Services Accountable Care Organization (ACO) Consulting
Solutions. She has over 15 years of provider experience in the areas of marketing and
strategic planning. Betsy joined Dell Services from Indiana University Health, a system made
up of twelve hospitals serving a large part of central and southern Indiana. Prior to her
current role, Ms. Block was a project manager for their clinical integration program, which
transitioned into an ACO in 2010.
This article by Betsy Block first appeared in our weekly Washington Report in November. The
Washington Report is a weekly digest of insights on healthcare reform, transformation, and
health information technology written Dell Healthcare thought leaders. Following the latest
developments in the policy arena, our thought leaders share their unique perspectives on
how the world of healthcare collides with politics and what it means for our readers. If you
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Source: Amerinet 2011 Executive Briefing on Healthcare Reform and Accountable Care
Source: Health information requirements for accountable care 2010