Accountable Care Organizations (ACO)

A model that folks in the health care delivery business are going to be hearing a lot more about is the ACO, or Accountable Care Organization.  This model is part of the Medicare reform driven by the Affordable Care Act that is still so hotly debated — but clearly moving forward.

As discussed in prior posts, the popular name for the legislation (leaving aside the term Obamacare) is clearly appropriate to the steps that are being taken by the federal government.  The focus is very heavily on cost, especially reducing the cost of Medicare.  The formation of ACOs is a critical component of that focus.

One measure of success that does pertain to both cost reduction and quality of care is changing the basis of payments from service-based to outcome-based.  For example, rather than paying home health agencies per visit (nurse, physical therapist, social worker, …), Medicare now deals with “episodes,” which constitute 60-day periods associated with a particular diagnosis (e.g., recovery from hip replacement).  Payment is made for outcome-based goals during the episode, rather than for services delivered during visits.  One of the new buzz phrases in this new world is “No outcome, no income.!”

One of the critical elements of the Accountable Care Organization concept is that, in most cases, multiple organizations will actually be involved, in order to move to a true outcomes-based model for measuring — and paying for — health care.  For example, a hospital or hospital system may be the anchor for an ACO that also includes doctors’ group(s), one or more home health agencies, and so forth; generally, folks who are concerned with the continuum of care that patients require, in a variety of settings.

The ACOs will also typically enter into contracts with other payers (besides Medicare), such as insurance companies, employer health plans, Medicaid, etc.).

We will be talking more about ACOs in upcoming posts, as they will be critical to creating a successful new health care delivery model.  Please share your thoughts on ACOs and other aspects of health care reform.

Best wishes.  Bert


One response to “Accountable Care Organizations (ACO)

  1. Pingback: Home Care and ACOs in Medicare Reform | Support For Home In-Home Care

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