While the number of Pioneer accountable care organizations (ACOs) shrank last fall, overall ACO enrollment is up -- and participants are investing heavily in technologies that analyze, save, and streamline to help generate the model's promised benefits.
The Pioneers were the showcase healthcare systems recruited by the Centers for Medicare and Medicaid Services (CMS) to prove the value of reorgnizing reimbursement for care around quality and efficiency -- for example, with incentives for eliminating unnecessary tests or eliminating expensive treatments for diabetics through better preventative care. That was followed by the launch of the Medicare Shared Savings Program in which participants were allowed to keep a portion of the savings they achieved on behalf of Medicare. Some private insurers introduced their own ACOs even before the federal ACO initiatives were initiated under the Affordable Care Act, and the federal programs are spurring more private sector activity.
The ACO movement has also seen some setbacks. Medicare recruited 32 Pioneer ACOs in December 2011, but membership dropped to 23 last year as some participants found the program's goals difficult to achieve. On the other hand, late last year 123 new organizations became Medicare Shared Savings Program ACOs, meaning they will be allowed to keep a portion of the savings they achieve. That was just the latest expansion -- overall, there are now 366 Medicare ACOs. Healthcare providers also work together to forge commercial ACOs, bringing the total number of ACOs to 606, according to CMS. Within two years, there could be between 700 and 1,000 ACOs.
Because their business model demands both quality and cost efficiencies, ACOs recognize they must use technology wisely to improve patient care and efficiencies, said Laura Beerman, healthcare network manager at Decision Resources Group, in an interview. After CMS released first-year results for Pioneer ACOs in July 2013, industry executives scrutinized the information to try and determine how to make the model succeed -- for patients, payers, and providers. Decision Resources found mixed results across ACOs in performance, savings, and patient benefits, Beerman said, but ACOs can learn from peers' experiences.
(Source: Decision Resources Group; designer: Steve Benton)
One answer: Use technology to eliminate redundancies, inefficiencies, and errors.
"We've been able to gather some data on how ACOs plan to distribute any shared savings that are achieved. Any shared savings are going to be initially reinvested back into infrastructure, and I think it's safe to assume [health] IT is a big part of that," Beerman said.
That's the case at Apollo Medical Holdings, operator of ApolloMed ACO. It announced Monday that it now has 30,000 Medicare beneficiaries and more than 700 member physicians. Executives credit technology and analytics (as well as a great staff) for its ability to reduce expenditures by $3.1 million during its first year as an ACO. As a result, the organization is expanding beyond Southern California into northern areas of the state, Mississippi, and Ohio, Dr. Warren Hosseinion, CEO of Apollo Medical Holdings, said in a statement.
As key tools for success, he cited the organization's expertise in analytics and particularly population health management -- analysis of risks and trends across the population of the ACO's members to identify opportunities to intervene. The goal is "to more efficiently manage patient costs through improved care delivery with a focus on higher quality patient outcomes, more efficient utilization, and better care coordination among providers," he wrote.
Integrating data across healthcare organizations is vital, agreed Jeff Smith, president of Mid-Atlantic initiative and strategic business development at ACO consulting firm Lumeris. "It's critical, to be successful in this new model, to incorporate both clinical and financial information into the new platform the provider is going to use. If I only have clinical -- where EHRs have historically provided information -- or financial -- there's no complete picture," he said in an interview. "You actually have to combine both, the clinical and the financial information, so a provider is able to do not only a better job treating patients across the whole continuum of care, [but] they also need the comparative cost information. [Having both] enables the physician and the patient to embrace that consumer-directed model that everyone's been talking about."
Download Healthcare IT In The Obamacare Era, the InformationWeek Healthcare digital issue on changes driven by regulation. Modern technology created the opportunity to restructure the healthcare industry around accountable care organizations, but ACOs also put new demands on IT.
Alison Diana has written about technology and business for more than 20 years. She was editor, contributors, at Internet Evolution; editor-in-chief of 21st Century IT; and managing editor, sections, at CRN. She has also written for eWeek, Baseline Magazine, Redmond Channel ... View Full Bio
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.