Challenges and Opportunities in ACOs | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Challenges and Opportunities in ACOs

September 30, 2011
by Mark Hagland
| Reprints
A recent report looks at shared-savings programs and sees multiple strategic and IT challenges ahead

In July of this year, Suzanne F. Delbanco, Ph.D., a noted expert on payer-provider relations and reimbursement issues (among other posts, she has been CEO of The Leapfrog Group), and the executive director of the San Francisco-based, non-partisan Catalyst for Payment Reform, an independent purchaser alliance working to improve healthcare quality and reduce costs, published a report on accountable care organization (ACO) development, along with researchers from Booz Allen Hamilton. The report, funded by the Washington, D.C.-based Commonwealth Fund, and entitled, “Promising Payment Reform: Risk-Sharing with Accountable Care Organizations,” looks frankly at many of the challenges facing provider organizations whose leaders might choose to participate in the Medicare Shared-Savings Program created under the Accountable Care Act (ACA), the federal healthcare reform legislation passed in March 2010 by the U.S. Congress and signed into law by President Barack Obama.

Examining 16 diverse private-sector shared-savings models, half of them involving actual shared risk, in a variety of markets nationwide, Delbanco and her co-authors note that their “research uncovered several key findings:

> Payer-provider shared-risk models are in an early developmental phase; there are few operational shared-risk models aside from the traditional capitated HMO model.
> There are varying definitions of shared risk, and shared-risk initiatives us a variety of program designs.
> Providers do not currently have the infrastructure required to take on and manage risk successfully, though some payers are providing infrastructure and other support to providers.
> Shared-risk models have typically evolved from shared-savings programs.”

In the end, the report’s authors conclude, those shared-savings and shared-risk payment models that have been launched in the private health insurance market are too much in their infancy to be able to be declared successes yet; what’s more, the complexities of establishing such models continue to dog their progress.

Not surprisingly, the implications of such findings for the potential of the Shared Savings Program under the Medicare program, as mandated by the ACA, are many. Even as leaders of patient care organizations nationwide consider the potential financial and care management quality gains to be made, the complexities involved in potentially participating in either Medicare’s Shared Savings Program or in a private health insurer-sponsored one, are not to be underestimated.

Delbanco spoke recently with HCI Editor-in-Chief Mark Hagland regarding the strategic, operational, and IT considerations involved. Below are excerpts from that interview.

What have been the biggest challenges you and your co-authors have uncovered in the case studies you’ve examined?

Well, the two elements that are critical for providers to have in place to be able to manage any financial risk are that first, they need near-real-time access to cost information; and they have to have near-real-time access to quality information as well. So it’s one thing if a provider is getting paid fee-for-service, and these things are nice to know. But in the new model, where providers are taking on more and more financial risk, to the point where they almost resemble insurance companies, they have to have the monitoring devices in place to alert them to any needs for changing course. And ideally, providers would have dashboards that they could turn to at any moment in time, and check their status.

Suzanne Delbanco, Ph.D.

I’ve spoken to Craig Lanway, the CIO of Hill Physicians Medical Group in Northern California, about some basic issues they faced in pulling together their program, with Catholic Healthcare West and Blue Shield of California. As he noted, even achieving success around developing a universal patient ID is a challenge. Have you noted some of those basic, even mechanical, challenges?

Yes, the providers right now are not there yet, per [operational] dashboards, so they’re reliant to some extent on the health plans. But that’s complicated. And to the degree that plans can monitor quality based on claims data is good, but has its limitations. So where things have the potential to be durable is where the health plan is set up, is planning to, and is actively providing, the kinds of data the providers need. In fact, that was one of our findings, that health plans need to be able to and prepared to do that, until providers are able to monitor these things themselves.

Do you think the issue of patient assignment under the Medicare Shared Savings Program—wherein accountable care organizations might end up being responsible for the outcomes of patients whom they themselves did not bring into their ACOs—could be a stumbling block also?


Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More