Book Excerpt: Are You Ready for an ACO Environment?

HealthLeaders Media, April 12, 2012

This is an excerpt from the HealthLeaders’ book The Healthcare Executive’s Guide to ACO Strategy.

You have read about the ACO requirements and anticipated changes. Now, for the difficult decision—do you want to join an ACO? Hospital administrators, physicians, practice managers, and other healthcare professionals can face this question. One of the first steps is to conduct a self-analysis to determine if you and/or your organization support the ACO philosophies. Would this be a good fit for you? What is the level of your current information technology (IT) infrastructure, technology adoption levels, and data collection capability? What is your current alignment of integration with a hospital; and if you are a hospital, with physicians?

Organizational Assessment
An organizational assessment can be determined by evaluating six key areas:

  • The organizational and accountability level and culture
  • Clinical results
  • Infrastructure
  • Leadership: ability to embrace the ACO philosophy and lead a team into a patient-centered environment
  • Coordination and information-sharing abilities
  • Costs: what are actual costs at the diagnosis-related group (DRG) and current procedural terminology (CPT) level?

These categories must be assessed, and some level of competency is required before an organization should begin forming an ACO on its own. While an organization is assessing its capabilities, it should pay particular attention to:

  • The operating data of the hospital
  • The information regarding healthcare services in its area
  • The availability for information sharing and coordination of care
  • The relative acceptance level on the part of physicians and providers to participate in an ACO
  • Current cost containment program


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