AJMC: Accountable Care Organizations Require Balanced Business Participation

PLAINSBORO, NJ — Achieving financial and clinical stability in accountable care organizations (ACOs) requires balancing the structure of markets and businesses, according to a study in this month’s issue of The American Journal of Managed Care (AJMC).

For efficient care, ACOs rely on a reimbursement model, one that rewards quality metrics and reductions in the cost of caring for a population of patients, rather than a traditional volume-based model that provides payment for each procedure. Accordingly, the study by Arthur P. Hayen, MSc, Michael J. van den Berg, PhD, Bert R. Meijboom, PhD, and Gert P. Westert, PhD, shows that ACOs seeking to provide effective care must examine whether their providers are configured to be reimbursed under this new model, and if each provider has the ability to manage the risk of a transition, both in terms of caring for patients and their bottom line. The ACO must also contemplate which medical procedures should be done by its own providers, and which should be contracted out to market providers.

Since the passage of the Affordable Care Act (ACA), more than 250 ACOs have been established, and those numbers are expected to increase. US health insurers are partnering with providers to collaborate on delivering more efficient, affordable, and quality care to patients in their networks. As additional healthcare providers and physicians begin to share services, they must be cautious of the challenges that can arise with transitioning from traditional independent fee-for-service models (FFS), to models based on value-based insurance design (VBID).

The study authors write that consideration of such a balanced treatment is lacking in the ACO debate. To make effective decisions on managing clinical and financial risk, ACOs must balance treatment of market and firm organization by recognizing the strengths each property offers. Markets and firms, in this case, are economic institutions that use a different mix of organizing methods. A balanced treatment of market and firm organization would allow for the coexistence of both volume and value incentives that would reflect the initiatives of many accountable care organizations.

“The FFS [fee-for-service] reimbursement system which remains in place does not by itself incentivize individual providers to practice in congruence with an ACO’s policy of cooperation, task substitution, and evidence-based care,” the study authors suggest, “An unbalanced treatment of market and firm organization in either policy, practice, or the public debate could therefore limit ACOs’ potential in successfully taking on clinical and financial accountability for patient outcomes.”

For all healthcare participants, the implications of ACO collaboration will continue to be an evolving field of study. However, with healthcare reform and an increasing appeal for patient-centered care, the ideals of coordinated care in ACOs will undoubtedly help to curb rising healthcare costs if managed efficiently and effectively by those who invest in them.

Read the article here.

CONTACT: Nicole Beagin

609-716-7777 x131

nbeagin@ajmc.com