ACOs: Stuck in the Wrong Conversation?

Gordon Mountford, for HealthLeaders Media, June 10, 2011

There are a lot of discussions going on in the healthcare community that center around accountable care organizations. Executives are reacting to the recent CMS announcements of new regulations and ACO models, trying to understand the real costs and implications of pursuing Medicare or commercial ACO development, and evaluating the overall risks and rewards of ACO participation. 

It's clear that healthcare organizations need to be thinking about how the ACO framework intersects with their own. However, many of the C-level healthcare executives I have been talking to over the past few months feel that this is a time for extreme caution in their strategic approach to the ACO concept.

Some leaders are optimistic about ACO models' potential to achieve important goals, such as lowering costs and improving quality. Others are skeptical about whether ACOs — either Medicare or commercial — are anything more than a rehash of the HMO and managed care initiatives from the 1990s.

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A shared concern has begun to emerge from ACO optimists and skeptics alike: that getting too deep into the conversations around ACOs may be more of a distraction than their organizations can afford.   

The Medicare ACO structure was designed to reward organizations that are effectively coordinating care, improving clinical quality, and significantly lowering costs for delivering care. But many top healthcare executives don't feel that their organization's current performance in these areas is sufficient to benefit from the incentives provided within an ACO structure. Nor are they sure that the investments necessary to create the new structure of an ACO will be a net benefit to their organization.

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