Managed Health Care: Accountable Care Organizations (ACOs) (Term Paper Sample)

Accountable Care Organizations (ACOs)
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Abstract:
An ACO is a network of professional health care providers clinically and financially accountable for the entire care continuum a specific group of patients. Depending on the type arrangement, hospitals, providers, and health insurers may agree to share the fiduciary duty to care for patients. The organization undertakes to meet cost and quality standards in exchange for a fraction of the savings realized from providing a better quality of care. The primary focus of this paper is to provide an in-depth understanding of the ACOs’ infrastructure for quality improvement, and health care cost containment. However, in addition to identifying to healthcare providers’ contracts and payment procedures in ACOs, this paper also analyses the impacts of ACOs on Medicare and Medicaid programs. In the last sections, the paper examines the role of Patient Protection and Affordable Care Act policies in ACO’s, and recommendations for improving quality and cost containment.
Introduction:
An Accountable Care Organization (ACO) is a model of health care delivery in which emphasis is given to the value of health care services rather than their volume. In the ACO framework, an organization willingly takes on the obligation of caring for a distinct population of patients (Houston & McGinnis, 2016). The organization undertakes to meet cost and quality standards in exchange for a fraction of the savings realized from providing a better quality of care. ACOs are, thus, created to realize the Triple Aim of improved health services, lower costs of care and improved patient experience or satisfaction.
The prime focus of this paper is to provide an in-depth understanding of the ACOs’ infrastructure for quality improvement, and health care cost containment. However, in addition to identifying to healthcare providers’ contracts and payment procedures in ACOs, this paper also analyses the impacts of ACOs on Medicare and Medicaid. In the last sections, the paper examines the role of Patient Protection and Affordable Care Act policies in ACO’s, and recommendations for improving quality and cost containment.
Managed Health Care Quality:
Healthcare quality represents the total benefits and satisfaction that patients derive from a particular care delivery system. A high performing or quality-based healthcare system has such features as incentivized compensation, cost consciousness, team-based care, technology tools, decent care access and good leadership or management system (Elman & Zaiken, 2016). Most accountable care organizations are champions of quality care because of their constant quality improvement measures.
Renowned for the ACOs’ commitment to quality improvement is the Medicare Shared Savings Program. As noted in Koury et al. (2014) and Berwick (2011), the Medicare Shared Savings Program (MSSP) was created under the ambit of Affordable Care Act (Section 3022) as a key reform to the Medicare provision system and a new style of healthcare delivery. According to Damore (2015), this happened due to the realization that the care system fragmented and there was no clear locus of accountability for health care quality and costs for patient populations. Being a creation of the constitution, ACOs integrate MSSPs to "facilitate coordination and collaboration among providers to advance the quality of care for beneficiaries of Medicare fee-for-service (Damore, 2015).The program incentivizes ACOs that cut their growth in healthcare expense and meet quality performance benchmarks by rewarding them (Berwick, 2011).
Coordination of care practices enables providers to help patients manage their health conditions by guiding and pointing them to appropriate health care settings available within the care continuum. Together, the care providers manage the delivery and totality of care services given to specific patient populations. The overall implication is that ACOs have the ability to single out the care needs of people under its custody, track the care services received or not received by individuals in readiness for future constraints. A key strategy often employed by ACOs towards meeting this course is by making a substantial investment in health information technology (Tu, David, Lawrence, & Ross, 2015). That is the use of health information exchanges, electronic medical records, and patient management software in ensuring efficient service delivery.
Another strategy common with ACOs is the practice of holding healthcare professionals, nurses, doctors, providers, and physicians solely accountable for the life of the patients to whom they attend. Physicians have to ensure their clients are safe. Meaning, they are encouraged to cling to best practices in medicine and evidence-based clinical practice. Providers, on the other, hands are the payers of the defined patient’s medical fees suggesting that it is their responsibility to see that client’s fees are paid on demand.
By shifting more accountability for medical outcomes to care-providers, ACOs have shown positive advancement towards improving the quality of care and reducing costs. Prior to the rise of managed health care system, clinicians used to practice with little consideration to cost. Providing services to patients were the ethical imperative. According to Muhlestein, Croshaw and Merrill (2013), the fee-for-service payment system, in fact, compensated physicians for delivering more care, since the more they delivered, the more pay they could collect. However, with the advent of accountable care organizations, clinicians are forced to contemplate the aspects of necessity and cost when delivering care. Obama (2016) argues that there exist a monotonic relationship between quality and cost healthcare. A reduction in cost reflects an equal drop in the quality of care. Working on a behavioral change has, thus, remained a key quality assurance strategy in most ACOs. Creating incentives is an effectual way to cultivate and drive behavioral change. Under the ACO framework, health care providers change behavior hinged on an acknowledgment that they are accountable for quality outcomes of an individual.
Cost Containment:
ACOs often strive to deliver quality healthcare services at lowers costs that are affordable to nearly all its beneficiaries by scrapping unnecessary procedures and reducing hospital admissions. They have an overarching system for coupling new forms of provider payments (episode-of-care and global payments), and other health care delivery system restructurings, like electronic medical records and medical homes (Berwick, 2011). The payers including Medicare, Medicaid and other private insurers, contracts directly with provider organizations without the assistance of a health plan intermediary like a managed care plan (CMS, 2015). In and of themselves, Accountable Care Organizations are not a cost repression stratagem. Rather, they are a medium for executing inclusive payment reforms and health care system reshape as a way of taking control over the persistently growing healthcare costs (Deloitte Consulting LLP, 2013) and deriving the maximum value of each dollar spent on healthcare.
One of the ACOs’ cost containment strategies is by having a wide range of collaborative providers accountable to health care insurers for the total cost and quality of care outcomes for a defined population. The provider payments have gradually diminished the role of ancient system’s fee-for-service recompense. Instead of consumers paying for the services directly from their pockets, a third party (payer) undertakes that role by settling all the resultant medical fees (). Consequently, patients do not feel the cost-effect of their conditions. Their only role, as participants, is to pay the regular premiums as per the plan.
However, the above strategy may not work effectively without the cooperation of the primary care providers like physicians, doctors, and nurses. As a result, ACOs often emphasize patient engagement as another cost containment approach. There is adequate evidence suggesting that centering on patient engagement can actively minimize service rates and improve overall patient health and safety. Healthcare providers make a lot of money from insurance companies and Medicare programs by keeping their patients healthy. A report published by the Brookings Institute (2014) shows that patient engagement is key to improving patients’ health and reducing associated health care costs. From the report, it was found that families and patients who are actively integrated, involved and engaged in decisions relating to their health stand a better chance of adopting healthy behaviors and management techniques for chronic conditions. Therefore, by making patient engagement a key care component and an operating strategy, ACOs spin an outstanding cost-containment tool.
Far from patient engagement focus, most ACOs outsource services, especially, those which they can hardly provide due to inflated costs associated with them. For ACOs, outsourcing includes reaching agreements with other members of the ACOs and bringing particular services, like imaging, into the primary care exercise to contain costs and improve convenience for defined patient populations (Feldman, 2015). There are also organizations that manage all the administrative of ACOs. Most of such organizations are authorized and funded by the government. The more services an ACO have at its disposal, the more containment it may have over related costs and guaranteeing that the services are being...