What is an ACO? - Understanding the Accountable Care Organization Concept

18. 04. 15
posted by: Data Management
Created: 15 April 2018
Hits: 804

As healthcare facilities transition into this new phase of collecting, storing, analyzing, and sharing patient information, it has led to the formation of the Accountable Care Organization (ACO) concept. Because this is a newer concept to most people, we want to define:

  • What is an ACO
  • What are ACO payment models?
  • Where do ACOs focus?
  • How is an ACO established?

Thanks to electronic records and the capabilities of online data transfers, sharing patient data has been greatly simplified. Healthcare professionals are coming to a point where they can easily access patient data from a variety of healthcare physicians each patient visits. Because patient data is readily accessible as long as it follows HIPAA guidelines, this has provided doctors with a way to better coordinate their services to ensure the whole patient is being treated in the best way possible. 

What is an ACO?

The first mention of the concept occurred in 2006 and the concept was brought with it a slew of interest and debate. In 2009, the Affordable Care Act gave a definition of ACO, but it's important to understand that it doesn't have definite boundaries. An ACO is a concept that continually evolves as technology and medical science become more advanced. 

The basic, generic definition for an ACO is "a group of health care providers, potentially including doctors, hospitals, health plans and other healthcare constituents, who voluntarily come together to provide coordinated high-quality care to populations of patients." The purpose behind ACOs is to enhance the medical care that healthcare facilities are able to provide to both individuals and populations of people. The concept of Accountable Care Organizations was created by Dr. Elliott Fisher back in 2006. He is a highly respected doctor and currently serves as the Dartmouth Medical School’s Director of the Center for Health Policy Research. When Fisher coined the term ACO, it immediately made waves throughout the medical community. Once the Affordable Care Act (ACA) made its way into the mainstream political dialogue in 2009, the term ACO began spilling into the mainstream.

Understanding ACO Payment Models

There are a range of payment models used by ACOs. Some operate on a payment-per-person basis while others prefer a payment-per-service method. Because traditional payments operated on a transaction-based model, they do not meet the requirements to be considered ACO-approved. ACO payment models prefer reimbursements to be provided under a capitalized model that augments incentives for efficiency, effectiveness, optimal quality, and superior safety for populations of patients.

ACO Treatment Methods are Centered around Effectiveness

ACOs focus a large portion of their services toward those who are injured and/or seriously ill. It should be noted, though, that ACOs place a large focus on preventative services, as well. After all, there is a greater financial reward when preventing illnesses rather than having to treat them. Because of this, ACOs are generally dissuaded from implementing costly newly-developed treatment methods when there is no proof that the methods are effective. Instead, time-honored alternatives with high success rates are encouraged. 

How to Establish an ACO

If you're wanting to establish an ACO, it must be capable of delivering high-quality care in an efficient manner. All included healthcare organizations should integrate their patient data according to HIPAA guidelines, ensuring that the best care possible is delivered each time a patient visits. An organizational structure will need to be developed, one that includes all aspects of delivering first-rate quality care, including:

  • Enrollment
  • Member Services
  • Population Health
  • Local Issues
  • Costs and Reimbursement

In addition to the above, clinical staff members need to be extensively trained to provide care to large populations for many years. It is by treating patients for extended periods of time that physicians can better manage their health. 

Referral management and source data acquisition seem to be two areas of stress for ACOs. Structure and well-developed processes to effectively manage referrals can help eliminate referral management issues, and the ability to integrate data from both ACO and non-ACO affiliated entities can help deter source data acquisition problems. 

Lastly, to be an effective ACO, meaningful metrics must be in place to analyze the conditions of both individual patients and large patient populations. This means a highly sophisticated analytic system needs to be deployed, one in which flexibility and scalability are two of its best features. What is an ACO? It is the future of better healthcare, improved population health, as well as refined patient satisfaction with reduced overall costs.

Accountable Care Organizations Accountability

Medical care provided by ACOs are patient-centric. This is a refreshing change compared to profit-driven medical care offer by traditional providers. ACOs are responsible to patients as well as third-party payers for high-quality medical care implemented in a safe manner. ACOs do much more than merely provide high-quality care to those in need of medical attention. They also work with patients to impart knowledge and advice regarding preventive health care. This is a stark contrast compared to traditional for-profit care providers. ACOs are all about actually preventing sickness and disability in order to avoid having to treat someone who is already ill. Those who provide care through ACOs do not use costly methods of treatment that just hit the market. Rather, they employ proven medical treatments and actually assume some or all of the insurance risk.