Should Your Practice Join an Accountable Care Organization?
There is no business that can really change and pivot at a moment’s notice no matter how agile they claim to be. Anybody who has worked in the U.S. healthcare system knows that it is an industry that never pivots at a moment’s notice. Sometimes change can take decades. But one thing that a physician can do to influence change and take a leadership role within the system is through membership in an accountable care organization, or ACO.
What are Accountable Care Organizations?
ACOs that are federally regulated and fee-for-service Medicare organizations are among the standard setters for a value-based payment structure, and yet the participation is totally voluntary among physicians.
Any ACO needs these factors to be foremost among their organization;
- Acknowledging that a value-based model requires progressive change among both staff and clinicians.
- Understands the needs of the patients being served to improve their healthy outcomes
- Track, communicate, and share information through multiple technological sources across the physicians that make up the organization.
These ACOs are made up of health care providers plus hospitals and doctors who treat patients that have Medicare. The goal, therefore, is to make sure each patient gets tremendous personal care in a highly efficient way, lessening the number of medical errors that can be part of a system.
The Benefits of ACOs
Significant Performance Bonuses for Participants
Successful ACOs can produce group performance payouts in the tune of hundreds of millions, however this comes with an with an important caveat: that those who get enough savings to qualify for extra payments don’t often happen in the first year. It can sometimes take up to five years before the bonuses become realized. A lot of these benefits depend on the population serviced and what care was needed by patients, so geographic location is a big factor. An ACO in Palm Beach, Florida, earned more than $28 million in performance payments among its 275 providers and 175 specialists.
Knowledge Sharing for Improved Patient Care
ACOs can help physicians share best practices, which result in a higher quality of patient care. When an ACO is able to meet the benchmarks set by Medicare, it’s the result of improvement of the care for patients often not covered by Medicare. ACOs that are established as able to change delivery practices and by doing so, take on contracts with larger revenues. And often times, patients don’t realize their care is coming from an ACO until they receive a new service.
Remain Independent and Increase Revenue
Being able to practice medicine in a way that brings value to a community can sometimes not be sustainable for an independent doctor, but when part of an ACO, you are able to remain independent and still have a greater chance of financial success. Being part of an ACO means having regular, detailed performance data and being able to see what you are able to do relative to costs for each visit, giving an independent physician the chance to see ways to be more efficient and effective.
Now, that we’ve discussed several advantages, to be fair there needs to be discussion about some potential disadvantages.
The Disadvantages of ACOS
Adapting to a New Business Model
ACOs sometimes require a new business model to be organized so that the intended goals of cost savings balanced with a quality care can be met. If you are a practice that has been heavily reliant on the fee-for-service model, there would likely be a large adjustment period required, and that can have frustrations and delays of its own. Remember, because it’s the healthcare system, a transition will not happen overnight, or in a few weeks, and often not in a few months.
Along with the opportunity for bonus payments, there is also the chance of having to participate in a shared loss among the ACOs should certain benchmarks not be met. Especially for an ACO that is in a transitional phase, the downside risk can be higher. You also are not able to anticipate any surprise costs of participation that may come with additional reporting of data and forms to fill out (because there’s always forms, right?)
If you are a small local physician that normally does not have a huge workload, joining an ACO may increase that workload by multiples. There can be mandates from an ACO for the amount of patients seen as part of the bonus organization. There may be time to see additional patients, sure, but the emotional energy needed to invest in double or triple the foot traffic through your office may wear you down over time.
Ready to Make the Switch to an ACO?
Med USA, we have decades of experience in the medical field so you can focus on what’s important: Giving the best possible medical care to your patients. Talk to a practice management expert today and find out how we can work together on a multitude of medical needs that can lessen the workload of any physician’s office and help you focus on the patients that require your help.
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