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ACO Risks and Rewards

September 3, 2010
by Mark Hagland
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Interview: Lisa Bielamowicz, M.D., Managing Director, Health Care Advisory Board, and National Physician Practice Leader, The Advisory Board Company

Last month, Lisa Bielamowicz, M.D., a practice leader at the Washington, D.C.-based Advisory Board Company, co-presented a webinar on the opportunities and challenges facing clinicians and provider organizations who might choose to participate in a new program created under the federal healthcare reform legislation passed in March of this year, the Patient Protection and Affordable Care Act (PPACA). One section of the PPACA authorized the creation of a program for accountable care organizations (ACOs) under Medicare, to open on January 1, 2012.

As hospital, health system, and physician group leaders examine the issues facing them should they consider applying to become part of this shared-savings program under Medicare. Bielamowicz says they need to think strategically about their strategic assets and liabilities going forward. She spoke recently with HCI Editor-in-Chief Mark Hagland regarding ACOs, and the information technology challenges their would-be creators will face in the months and years ahead.

Healthcare Informatics: How did you, and the Advisory Board Company, become involved in advising providers on ACOs?

Lisa Bielamowicz, M.D.: We have 3,000 hospital organization members, representing over 80 percent of all acute-care hospitals larger than 80 beds, in the U.S. And we’ve expanded to offer a host of operational strategy and IT implementation solutions for our members, and more consulting-like implementations, to be more hands-on with our members. I focus on the physician space, so I’ve led a lot of our best-practice work in the accountable care space.

HCI: So you’re basically offering strategic consulting in this area?

Bielamowicz: Our work includes that, but we still do best-practice research also.

HCI: So, what are you learning, and telling members?

Bielamowicz: Right now, we’re in the middle of our annual CEO meeting series, where we bring together groups of hospital and health system CEOs across the country, and the meetings—we’ve had more than 20 so far—have been focused on accountable care. This is, bar none, the area of the most interest to hospital CEOs right now. The genesis of the ACO idea came out of market-driven changes; but now that we have a healthcare reform bill on the books, the bill is the catalyst, and now, organizations have to respond to it.

So we’re helping them to baseline their organizations to determine whether and when they might jump in. And they’re also looking at possible models. The reality is that even organizations that essentially already have ACO-like structures, will have to make major adjustments going forward. In fact, nearly all organizations on this path will be in the uncomfortable position of having one foot in both boats for some time [i.e., will be paid via both normal Medicare fee-for-service reimbursement, and ACO reimbursement, at the same time].

HCI: Isn’t one of the challenges that federal authorities haven’t yet populated the whole language of the legislation?

Bielamowicz: That’s true, but if you’re viewing this through the Medicare lens, there is a pretty hard and fast timetable. This program is a program, not a pilot or demonstration, which means that if any organization meets the ACO definition under Medicare, they can receive a contract under the program. And the start date for this is January 1, 2012. So if you want to get a large part of your reimbursement from this program, you need to start planning now.

HCI: What percentage of reimbursement might come through this program?