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Accountable Care Organizations (ACOs) are collectives of healthcare practitioners that are responsible for rendering services to a certain patient population, such as elderly individuals enrolled in the Medicare program. The main feature of ACOs is work under a value-based payment system that has the purpose of providing maximum health benefits to patients at the least total cost (Conrad, 2015). It is clear that the arrangement of an ACO can provide hospital communities with multiple advantages yet multiple nuances must be taken into account to minimize potential drawbacks of such an initiative.
When deciding whether to accept the government’s offer to form the ACO, it is essential to evaluate available research evidence on factors defining the success of such organizations, as well as advantages and disadvantages of capitated annual payments in terms of both employee and customer satisfaction. For example, while ACOs have proved to ensure fewer healthcare expenditures and to lead to better quality of care, they require significant investments in technology and workforce (Colla & Fisher, 2017).
Additionally, Colla, Lewis, Tierney, and Muhlestein (2016) state that large healthcare systems may struggle to arrange ACOs because they tend to be excessively centralized. One needs to assess the hospital and the overall community environment to see if necessary resources are available to implement the initiative efficiently and evaluate the extent of changes needed to facilitate the shift.
When choosing between a fully and partially integrated ACO mode, the latter seems to be more advantageous for healthcare providers. The main difference between the two is that when the hospital is fully integrated into the ACO and takes a leadership role in it, providers’ core contracts are suspended, while in the partial integration mode, they remain active (British Medical Association, 2018). It means that total commitment to the ACO will result in reduced autonomy and independence of healthcare practitioners and such an outcome may be considered unfavorable. Thus, it would be preferred for the hospital to participate in the contract without taking the leadership role.
Considering the potential advantages of ACOs and the suitability of the community and the hospital for the arrangement of such an organization, I would argue in favor of the initiative. The main benefits of capitation include greater autonomy in terms of financing preventive and individualized care strategies and a higher level of budget predictability (Merrill, Watkins, Jorna, & Muhlestein, 2015). One of the potential drawbacks is that financial risk management is not total within this system (Merrill, Watkins, Jorna, & Muhlestein, 2015). However, it can be partially minimized with careful planning and adherence to prescribed quality standards.
In ACOs, practitioners should regularly discuss their shared patients. Thus, care must be coordinated through efficient team communication (that is, regular team meetings focused on problem-solving) and advanced information technologies facilitating knowledge management (Rundall, Wu, Lewis, Schoenherr, & Shortell, 2016). In addition, to achieve better coordination, a shared vision and goals must be developed at the leadership level in order to motivate all parties to work together (Rundall et al., 2016). Noteworthily, shared vision can help improve performance in terms of multiple quality measures.
Lastly, since capitation is associated with bigger financial risks than the fee-for-service model, it requires the adoption of stricter efficiency and quality standards at the hospital. Thus, the major innovation in the way care is organized in the hospital will be the accent on direct links between medical services and spending. For even better outcomes, it would be appropriate to add more such patient values as comfort and satisfaction to services rather than merely focus on prolonging the lives of patients.
Considering that ACOs receive bonuses based on their results in meeting quality standards, such a change in care delivery is essential. Overall, it is possible to conclude that, with the right approach, the arrangement of the ACO can considerably benefit both the community and the hospital.
References
British Medical Association. (2018). Focus on the ACO contract for fully and partially integrated accountable care models. Web.
Colla, C. H., & Fisher, E. S. (2017). Moving forward with accountable care organizations: Some answers, more questions. JAMA internal medicine, 177(4), 527-528.
Colla, C. H., Lewis, V. A., Tierney, E., & Muhlestein, D. B. (2016). Hospitals participating In ACOs tend to be large and urban, allowing access to capital and data. Health Affairs (Project Hope), 35(3), 431-439.
Conrad D. A. (2015). The theory of value-based payment incentives and their application to health care. Health services research, 50 Suppl 2(Suppl Suppl 2), 2057-2089.
Rundall, T. G., Wu, F. M., Lewis, V. A., Schoenherr, K. E., & Shortell, S. M. (2016). Contributions of relational coordination to care management in accountable care organizations: Views of managerial and clinical leaders. Health care management review, 41(2), 88-100.
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