5 tips for fine-tuning your ACO

September 8, 2014

Transform care through innovative payment strategies

ChaetThree years ago, Independence Blue Cross ventured into relatively unchartered waters when it launched a new Accountable Care Organization (ACO) payment model that provides incentives to organized hospitals and physicians that excel at managing costs and improving care. Today, more than 90% of the eligible health systems in our network participate in its ACO payment model and early results are positive. 

The following valuable lessons were learned and can be used by other health plans starting this journey or fine-tuning their value-based contracting strategies.

1/ Drive change that counts

ACO incentives must be substantial. Historically, pay-for-performance models offered too little incentive dollars to doctors and hospitals to drive meaningful change. The infrastructural changes needed to transform into an ACO are considerable, including systems and workflows to update, processes to revise and staff to hire. 

The financial reward for those efforts must fundamentally alter the ACO’s current economic structure and reflect their significant investment in time and resources.

 

2/ Keep things simple

Some ACO improvement plans include too many initiatives, and this can be both distracting and unproductive. Successful ACOs should concentrate on four to five cost and quality initiatives-such as reducing unnecessary emergency department visits-and tie compensation toward meeting clearly-defined goals around these metrics. This “less is more” strategy is critical. In fact, one ACO executive says its hospital’s plan is for doctors to focus on just two things: proper discharge planning and closing gaps in key health quality metrics. 

3/ Engage all stakeholders

Excellent and robust primary care is vital to improving health outcomes, and the tremendous growth in patient-centered medical homes is a strong backbone for driving necessary changes in patient care. An ACO model must support the philosophy of keeping patients well and out of the hospital, and this starts with PCPs. However, specialists often steer patient care and may drive significant volumes of healthcare costs and utilization. Failure to include specialists in an ACO payment model is a significant oversight. Independence Blue Cross built a program that integrates PCPs, specialists and hospitals and aligns them toward shared goals and incentives.

 

4/ Create partnerships

Health plans should work closely with ACOs and provide resources to help them succeed, including dedicated support teams from cross-functional areas such as network management, informatics, actuarial and clinical services. One of Independence Blue Cross’ key reports focuses on helping ACOs improve care coordination and discharge planning with patients as they leave the hospital. ACOs also need to invest in their own infrastructure to maximize their incentive bonuses.

5/ Be patient – it’s a journey 

Accountable care is a journey and it’s important to set realistic goals and not expect too much too soon. At first there will be some winners and some losers. But, in time, everyone should see meaningful change across the healthcare spectrum. 

Doug Chaet is senior vice president, Contracting and Provider Networks at Independence Blue Cross and the founder and chairman of the American Association of Integrated Healthcare Delivery Systems (AAIHDS). He is also an MHE editorial advisor.