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ACOs: From Volume to Value

Jim Molpus, for HealthLeaders Media, March 14, 2011
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Perhaps most difficult for health systems is how to manage risk, a skill set that few health systems have unless they own a health plan. Werner says it may not be necessary to own that particular expertise at managing risk, but hospitals must understand it and begin to build relationships and capabilities for risk. Werner says that when CMS and commercial payers begin looking to contract with ACOs, they will seek out experienced players.

“You are going to get it because you have already demonstrated you can, in fact, manage a population of patients at a reduced cost and better patient experience,” Werner says.

Steve Hester, MD, chief medical officer for Norton Healthcare, agrees that most health systems have little institutional experience in managing risk, but he believes that ACO structures from CMS will have a transitional element.

“Putting someone immediately into a capitated model would mean quick failure for organizations that really don’t have the infrastructure or expertise to manage that effectively,” Hester says. “When you look at shared savings models, it is an opportunity for that transition.”

The shared savings model means negotiating several factors with payers, including the attribution model for deciding which patients are assigned to which doctors, determining cost trends, adjusting the benefit designs and wellness programs, accounting for high-cost outliers, and negotiating the shared savings percentage.

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1 comments on "ACOs: From Volume to Value"


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