Accountable care organizations (ACOs) are often touted as the healthcare delivery model of the future. Though CMS’ Medicare Shared Savings Program gets lots of attention from analysts and the media, the real direction of ACOs is being determined behind the scenes in the private sector. Commercial ACOs cover millions of lives but are often overlooked because they have no public reporting requirements, their existence is not always announced, and rarely do providers or insurers give a complete account of their performance, unless one does especially well. However, they encounter some of the same obstacles: managing the challenges of value-based reimbursement, developing effective physician leadership, and determining the best way to use technology.
Despite the lack of some data, enough information exists to define the scope of commercial ACOs operations today. According to a recent Leavitt Partners analysis, shared risk and shared savings agreements between providers and commercial insurers covered 17.2 million lives in April 2016, over twice as many as Medicare and Medicare ACOs combined. Definitive Healthcare currently counts over 500 commercial agreements, nearly 400 of which are directed by one of five major insurers. In terms of general structure, commercial payers usually provide claims data, analytics capabilities, and sometimes care managers to help patients navigate their care options, while providers are in charge of clinical operations. Many also emulate the MSSP model, paying providers for services normally and comparing costs to a target benchmark each year.
Top 10 States with Highest Number of Commercial ACOs
*Source: Definitive Healthcare. Percentages reflect current Definitive Healthcare figures. ACOs are continually being formed and concluded, and current figures may differ slightly. ACOs are defined as agreements containing a shared risk/reward component
To succeed in a commercial ACO, provider groups must adapt and overcome challenges in several key clinical and administrative areas. Perhaps the most important is managing value-based reimbursement, which demands new technology, operational processes, and often a cultural change. The new focus on quality and cost-efficiency requires investments in technology, operational processes, and even a cultural change on the provider level. ACO participants have to think about patient care across the entire continuum, and some organizations have made significant investments in their physician network to ensure they have sufficient control over a patient’s episode of care.
Strong physician leadership is also critical for commercial ACOs operations. Value-based care forces physicians to alter the way they practice medicine and adopt new methods of care delivery. The new functions have required physician workflow to be more data oriented, leading to widespread irritation among doctors across the country, most notably with EMR systems. While improvements in technology or reassigning responsibilities to other staff may help, prominent physicians who lead by example can inspire others to work through the issues and create buy-in among providers. Physician leaders can also take responsibility for developing models of care and best practices that accommodate the needs of both doctors and patients.
Unsurprisingly, information technology is a critical aspect of ACOs operations. A strong predictive analytics capability is very important, since it allows providers to proactively manage patients at risk of admissions or other complications that can lead to higher costs. One major challenge is building the necessary IT infrastructure to properly gather and analyze data. Some organizations choose to outsource analytics to third parties, but not all vendors are created equal. Organizations that develop their own analytics capabilities also face unique obstacles, such as integrating multiple platforms together and maintaining an efficient workflow.
Even though few doubt that value-based care is the future of healthcare delivery, how quickly it will come to dominate the reimbursement landscape is an open question, especially given the challenges providers face. Without uniform public reporting for commercial ACOs, it’s difficult to assess the industry’s progress. Some insurers have highlighted their own successful commercial ACO operations, such as UnitedHealthcare, whose value-based care initiatives have witnessed an increase in preventative screenings and primary care access along with lower readmission rates and costs for certain medical services. If the experiences of commercial ACOs so far are any indication, healthcare leaders, individual physicians, and technology vendors will need to work together to bring about an efficient, value-driven healthcare system.
Definitive Healthcare has the most up-to-date, comprehensive and integrated data on over 7,700 hospitals, 1.4 million physicians, and numerous other healthcare providers. Our information includes detailed profiles and tracking of all types of accountable care organizations as well as other types of value-based care initiatives.
For more information on the top Medicare Shared Savings Program ACOs, download our featured report.
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