Introduction
The Patient Protection and Affordable Care Act (PPACA) has had a significant impact on the American healthcare system. Innovations were aimed at increasing the accessibility and quality of medical services for users. As a result of the passage of PPACA, Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs) emerged (Leung et al., 2020). The origins and functions of ACOs and their focus on reducing costs and optimizing financial performance need to be examined in more detail to understand their impact on the quality of health care.
The Origin and Structure
The origins of ACOs were driven by growing concerns about fragmented and poorly coordinated healthcare delivery. Compliance with all requirements and aspects of healthcare is necessary so that patients can receive adequate medical care, regardless of their situation and financial status (Hale et al., 2021). The strategic impact of ACOs is characterized by a transition from fee-for-service reimbursement models to value-based care.
The ACO concept has essential aspects that were based on Dartmouth-Hitchcock Clinic’s Pioneer ACO project. This practice also aimed to improve the quality of customer service in healthcare settings. Accordingly, the official introduction of ACO is due to the fact that medical institutions need more structuring and organization, which can be achieved through the introduction of more stringent rules and concrete steps to reduce the costs of clinical operations.
The ACO structure is formed as a result of the collaboration of healthcare organizations, including primary care physicians, specialists, hospitals, and other related institutions. Thus, the critical nature of an ACO is the shared responsibility and participation of all parties to achieve a typical result that will be reflected in improving the delivery of health care (Hale et al., 2021).
In addition, the ACO structure is community-oriented to promote collaboration across all entities and the exchange of necessary information to align incentives among all service providers (Hale et al., 2021). ACOs work with specific payment structures such as shared savings or capitation. This makes it possible to share economic responsibility and introduce monthly payments to stimulate the economic efficiency of the treatment provided.
Efforts to Contain Costs and Improve Quality of Care
Cost containment in the ACO structure is determined by several strategies that are imperative to resolve all existing difficulties that arise during the provision of medical services. ACOs prioritize care coordination to prevent duplication of services. To achieve this, care teams must work together to enable them to provide timely, expert care (Counts et al., 2019). A population health management strategy is to use patient data to inform action plans to prevent costly emergency department admissions.
Value-based contracts can incentivize healthcare providers to provide higher levels of care. In addition, this strategy is aimed at reducing unnecessary additional services that can burden the medical system and bring additional costs to clients. An ACO can facilitate the adoption of telemedicine, which also aims to reduce unnecessary costs and improve access to healthcare services for patients.
Quality improvement in the ACO system is achieved through various mechanisms that are further verified by quality indicators. This includes sampling-based quality assessments that include patient satisfaction and clinical outcomes. Meeting these targets is vital to encourage overall savings for patients (Teno et al., 2021). The ACO also makes recommendations for care that are based on compliance with specific guidelines that are consistent with evidence-based practices that have been implemented in clinical trials. This can lead to increased patient engagement, which is enhanced by shared decision-making, which improves the quality of healthcare services.
Health Care Providers’ Contracts and Payment Methods
In the ACO model, contracts with service providers and payment methods may differ from those adopted in pre-reform areas. A fundamental component of an ACO’s shared savings plan is the agreement among participating healthcare providers who are financially responsible. The cost and quality of medical services may, therefore, differ significantly from those of more expensive schemes.
Risk-sharing ACOs work in such a way that providers share the costs and responsibilities of their assigned patients. In this way, different suppliers can receive a significant share of the risk and cost share (Counts et al., 2019). If service delivery fails in this way, companies can function more successfully due to communication among themselves. Capitated payment models for medical transactions encourage efficiency and cost-effectiveness of care to achieve financial incentives and avoid unnecessary procedure billing.
ACO contracts are quality-based and include special payment incentives requiring providers to meet specific quality criteria defining the facility’s performance. Established quality indicators can help ensure that each contractor takes a more responsible approach to providing healthcare services (Teno et al., 2021). This includes providing preventative health care that can provide large numbers of people with the best care to protect citizens from the potential shock and inconvenience of disease.
Payment for treatment results and preventive measures are thus integrated into the ACO program. Providers can receive additional payments and benefits from their activities to pay more attention to clients and thus provide them with the most favorable conditions and quality medical services. Bundled payments are also an available option in ACOs that provide step-by-step payments for services and can provide a full range of treatment services, including those for chronic conditions.
The Impacts of ACO on Medicare
One of the significant impacts of ACOs on Medicare is cost savings for procedures included in the selected program. Focusing on healthcare coordination and disease prevention can positively impact how citizens accept payment model changes. Reducing unnecessary hospitalizations and unnecessary costs can help people feel more cared for. In addition, improvements in the quality of services provided may also affect how Medicare changes under the influence of ACOs (Hale et al., 2021). Medicare beneficiaries can receive higher levels of preventative care, leading to increased patient satisfaction. A patient-centered approach can increase satisfaction with services received, which also influences how people respond to changes in the health care program.
Patient-centered care is one of the most significant and visible impacts of ACOs on the Medicare program as it creates more personalized and individualized care. Such care can consider all the associated unique aspects of the patients to provide the most comfortable conditions (Yang, 2020). This, in turn, contributed to improved service quality and customer satisfaction.
A side effect is that the program has become a preventive measure for re-hospitalizations since a more attentive and individual attitude towards the patient has become a preventive measure. This helped doctors be more attentive to medical history or specific needs and thus consider all factors. The ACO also became a support system that facilitated the implementation and development of many innovations, including electronic health records (EHRs) (Yang, 2020). This influence has helped improve the availability of patient data and the adoption of telemedicine to increase access to quality medical care.
Specific Public Policy
One policy closely related to ACOs is the Patient Protection and Affordable Care Act (PPACA), also known as the Affordable Care Act (ACA). The signing of this law directly influenced the creation and organization of ACOs (Teno et al., 2021). A detailed look at the relationship between the ACA and its impact on ACOs can provide insight into how these regulations are interrelated. The first important category is the language in the ACA that established the Medicare Shared Savings Program (MSSP), which subsequently led to ACOs having a series of positive impacts on this structure (Kanter et al., 2019).
Due to this law, healthcare providers could create ACOs as they saw fit. This opened up many opportunities for further agreements regarding shared savings in Medicare. In addition, due to the ACA, some significant indicators were introduced that monitored the quality and delivery of medical services to patients. It also influenced the right of service providers to create joint savings arrangements, which improved the financial position of companies and helped them provide more comprehensive and detailed assistance.
The ACA was essential in outlining a general model for creating savings systems for providers who, in the event of a negative outcome, also had to share the damage, making the operation less risky. Accountability for public health became one of the main aspects implemented with the ACA and subsequently interacted with the quality improvement system discussed. Due to such legislative combinations, the healthcare sector improved the coordination of medical care and ensured that all parties were as satisfied as possible with the work done (Kanter et al., 2019). The discussed law was instrumental in expanding Medicaid in many states, allowing the company to help more people without financial risk.
Challenges for Payers and Providers
The ACO model under consideration contains some negative aspects that may affect the capabilities of both clients and service providers in its structure and functionality. One of the main disadvantages in this context is the financial risks for payers. They are reflected in the fact that the terms written into shared savings agreements or ACO agreements imply that the client is responsible if the ACO does not achieve the desired cost savings results. Thus, this means that a significant part of the finances, which is more than expected, can go to cover medical services (Cartier et al., 2020). The corporate desire for effective cost control may, in some cases, result in increased payments for service recipients.
Another significant disadvantage is data exchange and integration. The effectiveness of ACO largely depends on the speed of the Internet and data transfer in general. This is necessary to properly distribute the patient’s care among multiple providers (Wilson et al., 2020). Thus, if any malfunctions occur in the system or threats of cyber attacks arise, this can directly affect the performance of a whole range of services.
In addition, the constant transfer of personal data about medical history and other confidential information puts clients at risk. Standardization may also become a significant disadvantage that payers will have to overcome (Teno et al., 2021). Since all ACO contracts and payment models are different, aligning them to the same standards can be a complex and lengthy process that must align all incentives and product qualities. Thus, it is not always possible to provide high-quality medical services due to assistance based on cost reduction and the many legal problems that arise during the registration process.
For service providers in ACOs, difficulties may also arise, which, as stated earlier, may be associated with financial and other types of risks. This is characterized by the concerns of various companies regarding taking on the associated risks of providing paid services. Suppliers may suffer severe financial losses if they fail to fully meet budget targets (Wilson et al., 2020).
Another significant disadvantage is the difficulty in coordinating medical care, as it must be efficiently distributed among multiple providers to ensure maximum savings and quality for clients. This will require an initial investment in the management structure so that it can be reorganized to accommodate other workloads and functions. In addition, providers have certain restrictions related to access to patient attribution since they cannot select them independently.
Plan to Overcome Identified Challenges
Creating a comprehensive plan to overcome the identified challenges is imperative in order to ensure the full functioning of the medical system in the context of ACOs. One of the identified risks was the financial problems of service providers (Wilson et al., 2020). In order to avoid the possible negative consequences of this risk, it is crucial to take specific steps. The problem of financial losses is relevant for both suppliers and clients, which necessitates the presence of a comprehensive plan. The first point is risk adjustment. This involves introducing mechanisms to take into account different client populations in order to reduce the likelihood of important factors being excluded when any provider considers a client’s case (Cartier et al., 2020).
The second step of the plan is to ensure the safety of shared savings. ACO contracts will need to include specific clauses that will make it possible to reduce the liability of service providers (Counts et al., 2019). This can guarantee them some security from unexpected losses. The third critical step is to begin training suppliers so that they can anticipate financial risks when necessary.
The first step to overcome the problems associated with data privacy and data transfer is to implement common interoperability standards that can provide better protection. The second point is to invest in the development of a particular data system that providers will use. This should be a closed database to minimize intrusion and cyber-attacks (Cartier et al., 2020). The third mandatory step is to obtain the patient’s informed consent to transfer data in order to avoid further legal action in case of information theft. This plan will also help suppliers standardize data transfer to avoid the risk of delays in this process.
Conclusion
The healthcare industry in the United States has undergone significant changes with the advent and implementation of ACOs. This introduced a new paradigm for medical care that was able to achieve some success. Coordination and standardization of the medical approach became much better followed, which ultimately increased the effectiveness of treatment and reduced the rate of readmission. Such results were achieved thanks to an integrated approach characterized by the innovative structure of the ACO’s work. It allows one to combine several providers to provide medical services. This approach made it possible to optimize the healthcare structure by separating responsibilities and costs, which also brings more benefits to companies that provide treatment.
References
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