Introduction
Accountable care organizations (ACOs) comprise groups of providers that coordinate their effort to ensure high-quality, cost-efficient treatment under ACA. Creating ACOs promotes value-based care through financial incentives, “shifting from an emphasis on volume to an emphasis on value” (Hofler & Ortiz, 2016, p. 1). The participants of the program are rewarded with Medicare bonuses if they demonstrate excellent performance and can be penalized when they fail to comply with value-based care requirements. The positive outcomes for the patients are evident as they no longer need to manage their care and receive better treatment focused on health promotion. However, many providers doubt whether joining an ACO would help them reduce expenditures and become more profitable. The answer lies in seeing an ACO not as a set of requirements, but as a framework that gives all the necessary tools for achieving high standards of care through coordination and communication.
Advantages of the ACOs
The core benefit of ACOs is that they create the conditions to deliver the best quality of care with limited costs. This result is achieved through the principal tool of the program, which is the coordinated work of the providers who share the responsibilities and risks under an ACO. Due to this teamwork, unnecessary tests and procedures are eliminated as the physicians can obtain information about the patient from the integrated network. Thus, the program not only creates strict requirements but provides “opportunities for physicians and health facilities to partner and organizes to provide more coordinated care” (Berkson et al., 2018, p. 1). This framework also includes intensive work with patient data, which might be challenging for some providers, but in the future, it grants them efficient risk management.
The second essential argument in favor of ACOs is their potential to increase patient satisfaction, which affects the hospital’s work. The ability to provide patient-centered well-coordinated care and improve health outcomes attracts more beneficiaries to the hospitals, positively influencing its profitability. Furthermore, the hospitals are rewarded for their cost efficiency with a proportion of Medicare savings. This financial incentive, in addition to time-saving and improvement in patient satisfaction, is a driving factor of quality improvements.
Main Concerns with the ACOs
Despite all the benefits, many hospitals are not willing to join an ACO as their perceived benefits do not overweight the risks. The evidence shows that participation in ACOs is not cost-efficient for small practices, such as Rural Health Clinics, as it was marked by increased expenditures per visit (Hofler & Ortiz, 2016). Berkson et al. (2018) report that large hospitals with high-cost utilization were able to cut spending significantly due to ACOs, while the providers that had been cost-efficient before the participants were not rewarded substantially. Therefore, an ACO is an efficient tool to cut costs in the practices that suffer from over-expenditures, as it helps to optimize excessive processes.
Conclusion
Participation in an Accountable Care Organization is a significant step for improving the quality and patient-centeredness of care due to the coordination of all the stakeholders. Hospitals that manage to reduce their spending, maintaining an excellent quality of care are rewarded with the proportion of costs they help to save for Medicare. This financial incentive, however, does not work equally for all the providers. Evidence demonstrates that ACOs are effective for those institutions that have excessive cost use, as they help them to optimize their work. However, the program should be improved to reward small hospitals and those who were initially cost-efficient adequately.
References
Berkson, S., Davis, S., Karp, Z., Jaffery, J., Flood, G., & Pandhi, N. (2018). Medicare shared savings programs: Higher cost accountable care organizations are more likely to achieve savings. International Journal of Healthcare Management, 1–8.
Hofler, R. A., & Ortiz, J. (2016). Costs of accountable care organization participation for primary care providers: Early-stage results. BMC Health Services Research, 16(1), 1-8.