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For ACO Adoption Success, Leave Cost Out of It

Karen Minich-Pourshadi, for HealthLeaders Media, June 18, 2012

One of the main appeals of the accountable care organization model is the potential cost savings. So why did Palmetto Health System wait a year after launching its ACO to develop a shared savings program? For Palmetto, the ACO driver was physician alignment first and cost savings second. More than half of Palmetto's physicians joined its ACO in the first year—an enviable adoption rate that most healthcare leaders aspire to attain.

The board of directors at Palmetto Health, based in Columbia, SC, overwhelmingly approved an ACO in July 2010, named the Palmetto Health Quality Collaborative. But with nearly 1,000 employed physicians at the 1,138-bed, six-hospital system, getting physician buy-in had the potential to be a huge challenge. Which is why, from the onset, the Palmetto Health Quality Collaborative was designed to be physician-led. The primary goal was to develop best practices for clinical outcomes using evidence-based care. Over 500 physicians agreed to participate in the program.

The ultimate goal of the Quality Collaborative, says its executive medical director, Ellis "Mac" Knight, MD, MBA, senior vice president of physician and clinical integration, is to align independent, employed, and faculty physicians toward the reduction of unnecessary hospital admissions and preventable readmissions. That can be accomplished through clinical integration activities and by encouraging higher quality care through standardization, Knight says. The mission is not to reduce costs, though cost reductions invariably result from this pursuit, he notes.

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