Creating the Ideal ACO

The current fixation on Accountable Care Organizations (ACOs) is causing an enormous amount of two things:  (1) talking, and (2) inactivity.  Yes, the concept of delivering care in a manner that reduces or at least controls costs is important and interesting.  Yet, the marketplace is replete with people and businesses that have adopted a wait and see approach, which is really no approach at all.  Businesses and people who will thrive (especially in dynamic times) are those who, as always, take a lesson from sharks:  swim ahead or drown.

            So what about ACOs?  What the best “thing”?  How do you make one?  First, you have to do away with the focus on ACOs, since they are more of a concept than a thing.  Focusing on ACOs as a thing merely paralyzes the viewer because they are, by definition, not subject to such limitations.  What is clear, however, is what they’re supposed to do:  reduce costs and improve quality in a demonstrable way.  How do you do that?  Easy…squeeze the toothpaste tube backwards.

            The most expensive end of the toothpaste tube is acute care—hospitals.  Reduce patient admissions and readmissions and reduce costs.  The next most expensive part of the tube is specialist care.  Coordinate care and reduce specialist involvement in the first place and reduce cost.  So where does all this toothpaste get plopped?  Primary care!  Businesses or systems that place more control and focus on primary care and on prevention stand to save the most.  But that’s not enough! 

The missing piece in the entire healthcare reform debate and yet the most effective piece in terms of reducing costs and improving quality is (drum roll….) patient accountability!  So (the punch line), healthcare businesses and systems which empower primary care physicians and which create patient accountability are best suited to reduce cost, improve quality and hence to become an ACO, the core part of one or at least remarkably effective.  How do you do it?  A million ways, but as Americans probably the most effective way is…money.  More money for the “right” behavior, and less money for the “wrong” behavior. 

            Information technology (e.g. EMR) is the glue for the whole thing.  Without it, one cannot effectively measure or control cost or quality.  Right fit is the key issue with IT.  Hire a consultant who has no product to sell!

            Physician responsibility leadership and is critical.  For change to be effective, we cannot repeat the experience of the 90s with PHOs for instance.  Physicians failed and refused to effectively bring colleague behavior in line.  With the right financial incentives, however, that can be changed.  In fact, the very core of any business which effectively adapts to the call for change is the alignment of financial incentives.  Which is why we are having this discussion and experiment in the first place, right?

            The most effective ACOs are not the ones with the best lawyers or consultants.  They are the ones which have:

  1. A strong primary care core;
  2. Patient incentives for healthy patient behavior and disincentives for unhealthy patient behavior;
  3. Effective IT to track, measure and control cost and quality;
  4. A culture where the physicians and other components (e.g. hospitals) are committed to the best quality with the smartest expenditure of resources; and
  5. Physician leadership to ensure the “right” behavior.

 

Even if the “answer” isn’t ACOs, even if the healthcare reform law is found to be unconstitutional by the US Supreme Court, any organization which does what’s described here, in whole or in part, will be better off.  The best and most reliable thing one can say about healthcare reform and ACOs is that it is causing many people to move and improve.  It may not be an ACO, it may not do everything, but any improvement is good and right at this time.


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