6 ACO types, 6 different ways to transition to value-based care

Accountable care organizations (ACOs) vary widely in terms of ownership, patient care emphasis and organizational structure, according to a new report from Leavitt Partners.

The report identified six core types of structurally distinct ACOs, which the research team said can help serve as a resource for policymakers to revise ACO programs and provide direction to vendors to create services and products that will facilitate the transition to value-based care.

"We believe that different types of ACOs have different opportunities to achieve the triple aim and that one size does not fit all when it comes to managing patient populations," the report states. "The suggested opportunities and challenges are based on general observations and do not apply to every ACO in each category, but they do provide directional guidance."

The six ACO types include:

  1. Full Spectrum Integrated, which provide all aspects of healthcare directly to their patients, and are commonly dominated by a large integrated delivery network. "A challenge that many of these ACOs have is that they still view hospitals as a revenue driver. More money can be saved by reducing admissions than by reducing the length of stay for admissions," the report states. "Many of these organizations still focus on the inpatient side rather than on ambulatory care with the specific intent to reduce admissions."

  2. Independent Physician Groups, which are owned by a single physician group and do not contract with other providers. A major disadvantage for these ACOs is that they cannot affect the delivery of inpatient care, and "generally do not have ready access to capital," according to the report.

  3. Physician Group Alliances, which can be owned by multiple physician groups, but do not contract with other providers for further services. The model's biggest disadvantage is that all the groups must figure out how to work together, according to the report.

  4. Expanded Physician Groups, which only provide outpatient services directly, but may offer subspecialty or hospital services via contracts with other providers. Although the lack of hospital involvement means fewer revenue pressures, these ACOs are also left to set up operational arrangements with hospitals to better manage patient health, according to the report.

  5. Independent Hospital, ACOs with a single owner that provides direct inpatient services and, in the case of integrated health systems, outpatient services, but not subspecialty care. Although they provide  fewer services than Full Spectrum Integrated ACOs, they do have lower cost structures.

  6. Hospital Alliance, ACOs with multiple owners, at least one of which directly provides inpatient services. "With disparate providers, particularly when a significant number of different EMRs [electronic medical records] are in place, interoperability is a significant operational hurdle," the report states.

Distinct classifications for ACOs will help healthcare leaders identify what does and doesn't work for their specific organizations and maximize care value, report co-author David Muhlestein, Ph.D., director of research at Leavitt Partners, told Becker's Hospital Review. "Now organizations won't have to reinvent the wheel every time a new ACO comes along," he said.

The taxonomy will also help vendors, Muhlestein said, because "vendors are trying to sell the same products to all ACOs, and the same products don't work for all ACOs."

To learn more:
- read the report (.pdf)
- read the Becker's article

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