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8/7/2012
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8 Accountable Care Organizations Worth Closer Look

ACOs break new ground in healthcare as cost pressures mount for providers.
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Critics of healthcare reform might object to the very notion of accountable care organizations, pointing out that hospitals and medical practices always have been held accountable for the care they provide. Although that might be true in principle, many healthcare providers recognize the fact that the fee-for-service model that's currently in use doesn't really encourage clinicians to practice the most cost-effective medicine.

With that reality in mind, the Centers for Medicare and Medicaid Services (CMS), along with several private third-party payers, have laid out a more formal, metrics-driven system to ensure both quality of care and cost containment.

Speaking of reality, although it's theoretically possible to run a successful ACO without the help of an electronic health record system and related IT tools, it's clearly not the best approach. The point was driven home last year when CMS issued the final rule's 33 quality measures. Although not mandating the use of electronic health records (EHRs) and other forms of health IT for participation in their voluntary ACO initiative, the plan for what's called the Medicare Shared Savings Program relies heavily on the ability of healthcare providers to collect and share data. "ACOs, ACO participants, and ACO providers/suppliers are encouraged to develop a robust EHR infrastructure," the 696-page final rule states.

Since those rules were published, CMS released its first list of 27 qualified ACOs that meet the requirements of its Medicare Shared Savings plan. As of July 1, HHS announced that 89 new accountable care organizations have begun serving 1.2 million Medicare patients in 40 states and Washington, D.C.

That's not to suggest that the feds have a monopoly in this space. In total, Leavitt Partners estimates there were 221 private and public ACOs in the U.S. as of the end of May 2012. Some are sponsored by hospital systems and independent practice associations, others by insurance companies.

What most of these organizations have in common can be summed up in one word: risk. Because an ACO is a type of payment and delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients, if the organization fails to keep costs down while improving the health of its patients, it will lose money.

Clearly, the stakes are high. This overview of how eight ACOs are treading these uncertain waters might help inform your own decision.

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