5 strategies for sustaining ACOs

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More than half of all U.S. hospitals and health centers are not structurally sound to provide care within the costs of current Medicare and Medicaid reimbursement rates, according to management firm L.E.K. Consulting in a recent white paper.

Although the goal of providing care to all patients regardless of their ability to pay is commendable, hospitals and health systems will not be able to sustain that philosophy in the long term, particularly in the up-and-coming, financially risky coordinated-care world, according to the white paper.

More institutions, providers, and insurers slowly but surely are joining the ranks of the Accountable Care Organization (ACO) Pioneer program, arguably the less-risky model that will precede the Shared Savings program. For instance, Mountain States Health Alliance (MSHA) and Integrated Solutions Health Network just this week announced plans to form a Pioneer ACO, involving 13 hospitals in Tennessee, Virginia, Kentucky, and North Carolina, according to a MSHA statement. The group is one of 30 in the nation pursuing a Pioneer ACO contract with the Centers for Medicare & Medicaid Services.

Even as the Pioneers pave the way for the accountable care model, many continue to wonder what the formula is to making it work.

L.E.K. Consulting recommends the following tips to creating sustainability in ACOs:

  • Assess the market: Look at the community and its growing populations to assess what are the opportunities for care efficiency and cost effectiveness.
  • Create a new mindset: The goal of ACOs to provide care across the continuum will require that hospitals take a more holistic approach to patients in all settings.
  • Provide incentives: As many executives look at possible acquisitions, joint ventures, and alliances, consider the risk- and gain-sharing pros and cons with each partnership.
  • Integrate data: Hospitals and providers must move beyond the status quo and buy into meaningful use of electronic health records, key to coordinating care.
  • Measure performance: Track quality outcomes and cost metrics across multiple patient populations.

For more information:
- check out the full white paper (.pdf)
- read the MSHA statement

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