The commercial ACO "is a natural progression for us. We view it as a key to the reengineering of the care delivery system," he says. "We are making the shift from limited to full capitation, so this gives us additional dollars. … So we'll continue our clinical integration, which is a major source for our incentive pools, and now we have the opportunity for shared savings based on our performance."
Advocate Health Care is compiling its data and metrics on the patient outcomes from its first full year using this model and will release the information in the spring. In the meantime, Shields says the organization plans to pursue an MSSP ACO in the coming months. By doing so, the organization will change its reimbursement model—getting nearly 60% of its revenue from ACOs.
"We happen to think that expecting fee-for-service to last or hoping for continued rate increases will fail. We think both Medicare and commercial payers will decrease unit prices, so we'll just be running faster on the hamster wheel and getting paid less for it," says Shields. "However, we also don't think if a hospital or health system has not worked with their payers or physicians in a collegial way that an ACO is the first place to start—but this is [ultimately] the direction to move toward."
Shields is right that launching into an ACO with no foundation is ill-advised. However, healthcare leaders should assess their readiness, as much of the foundation may already be laid.
Working with the primary payer on a commercial ACO, instead of concentrating on one with your secondary payer, will put your healthcare organization in a stronger financial position and soften the inevitable reimbursement transition.