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10 ACO Blunders You Can Avoid

Margaret Dick Tocknell, for HealthLeaders Media, August 17, 2011

In an interview with HealthLeaders he noted that the big hurdle for many hospitals and physicians is that ACOs will require each of them to move from their comfort zones into new relationships with new responsibilities. Success will require adaptation and change. ACOs will need to become to become "learning organizations that can comprehend and expand what works and move to correct things that do not."

Shortell identifies 10 common mistakes made by organizations considering the formation of an ACO. He said he developed the list after speaking with stakeholders across the country.


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The blunders fall into two large categories--health systems overestimate their organizational capabilities and they underestimate the effort it takes to engage stakeholders.

On the organizational side, he said there's a tendency to underestimate risk and overestimate the capabilities of electronic health records. Looking at stakeholders, he said health systems underestimate the effort it will take to balance their needs with those of physicians and specialists, as well as the effort it will take to engage patients in care coordination.

'Shortell says the list below applies both to ACOs planned with CMS  and those planned with private payers, which are also known as "commercial ACOs".

1. Overestimating the ability to manage risk.
Shortell said this is especially true when rewards are at stake. The problem is that physicians and hospitals manage different types of risk. Physicians manage risk in ambulatory care settings while hospitals manage risk on inpatient care settings. The Medicare shared savings program requires the ACO to manage risk across the care continuum. That means hospitals and physicians must each give up some control and merge their risk-taking capabilities. That's not a step that comes naturally.

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