ACO start-up IT costs pegged at up to $4M

New accountable care organizations are going on a technology-spending spree in the next year, though most will rely on outside advisers in making those purchasing decisions, according to a new Black Book Rankings survey.

In total, the 302 developing and planned ACOs will spend $500 million on health IT systems in the first year.

In the survey, 96 percent said they are in buying mode. It put small start-up costs for small ACOs at more than $1 million for technology, while large ACOs will spend up to $4 million.

Hospitals are evaluating these systems, in order of priority: clinical decision support, revenue cycle management, health information exchange, electronic health record systems (new and replacement), e-prescribing, data center security and storage solutions, business intelligence and care coordination management.

Here's the troubling part, though: Less than 7 percent of these organizations have a synchronized stakeholder strategy for technology purchases due to lack of funds and/or expertise.

Eighty-eight percent said they will seek advice from consultants and vendors in selecting that technology. As 25-bed Girard Medical Center in Missouri can attest, depending on a vendor to help make IT purchasing decisions can cost hospitals dearly. It's embroiled in a lawsuit with Cerner Corp., alleging that Cerner failed to disclose the full price and scope of implementation.

Of the 302 surveyed ACOs, hospital systems are the primary sponsors for 168, physician groups for 91, insurers for 38 and community-based groups in four.

Among the other findings:

  • 39 percent of these ACO-purchasing decisions will be made before the third quarter of 2013.
  • 95 percent said this timetable reflects pressure to create ACOs and other changing reimbursement models.
  • 28 percent of those participating in ACOs have basic health exchange and interoperability strategies in place and will focus for now on community or regional exchanges, rather than national exchange initiatives.
  • More than half of all hospitals and payers say that return on investment in technology will come in the collaboration with ACOs and patient-centered medical homes within the first two years of operations.

Though clinical decision support systems top executives' wish lists--especially those creating ACOs--the benefits of them have been called into question in a study funded by the Agency for Healthcare Research and Quality.

Quality metrics and ROI for health exchanges are unclear, which could jeopardize their sustainability once the federal money runs out, according to a study published recently in Perspectives in Health Information Management. And that could be a factor in the slow growth of ACOs, which number only 154 in operation, though the Obama administration had predicted 270 for this year.

To learn more:
- read the announcement

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