Inside IT

Keith J. Figlioli

They've been compared to mythical creatures-most notably unicorns.

And a spoof on YouTube has even toyed with questions about their feasibility ("In Search of an Accountable Care Organization," Although few have actually "seen" an accountable care organization (ACO), we certainly have heard a lot about them, particularly since the Affordable Care Act was passed just over a year ago.

Understandably, some skepticism surrounds ACOs, primarily due to the unknowns. For instance, how should ACOs be organized and led? How quickly can they be implemented, given the cultural, financial, and operating changes required? If a group reduces costs, what portion of the savings should it keep? How should payments be divided among physicians, specialists, nurses, and others providing care? What financial benefits will flow to patients?

It's true that the concept of accountable care represents a dramatic departure from the status quo of healthcare delivery, and they could be a source of disruptive change to our nation's healthcare system. But no matter how it's referenced, there is a need for enhanced accountable care across our healthcare system. And the more we can understand what this concept is, the fewer concerns we will have about them.

Diagnosis: Fragmented Care Coordination

An ACO is generally defined as a group of providers that are willing and able to share responsibility for improving the overall health status, care efficiency, and experience for a defined population. Such a group has the potential to change the incentives in health care to focus on eliminating waste, improving quality of care, and promoting health and wellness, rather than solely responding to illnesses or injury.

Healthcare IT will play a pivotal role in supporting the evolution of organizations from the currently fragmented, transaction-oriented care delivery model to a fully accountable, coordinated model. To appropriately take responsibility for a population, providers need a complete understanding of the care and services they provide. Integrating data from inpatient and outpatient settings will help providers produce the actionable information around quality and cost improvement opportunities that are so essential to organizations' success.

But for the majority of health systems today, IT-facilitated care coordination across the continuum of care is limited. To succeed, providers need seamless care coordination with sophisticated capabilities for measuring population health status that can help them improve health status and reduce overall cost.

Population health data management refers to the IT enablement of the clinical and administrative aspects of care, with the goal of improving health outcomes. It goes far beyond an electronic health record and requires IT resources to collect individual health status data as well as to stratify and target populations based on their risk and need for care. It also requires tools to:

  • Engage people in managing their health using patient health records or online portals
  • Provide connectivity to a health information exchange to ensure portability of records
  • Direct physicians toward appropriate, evidence-based care protocols

Equally important, all of these IT systems must be interoperable, and data must flow seamlessly among them.

The concept of shared savings within an accountable care model is another area of skepticism for many. Through shared savings, Medicare would establish spending targets for providers that reflected the predicted costs for their patients. Those that meet quality standards and hold costs below the spending targets would receive bonus payments, including a portion of the savings achieved.

For instance, diabetic care today costs insurers an average of about $30,000 a year, most of which goes toward treating expensive complications. An oft-cited example of today's absurdist approach to health care is that many insurers will not pay $150 for a routine foot checkup, but nearly all insurers will pay $10,000 for a foot amputation, an all-too-common remedy in advanced cases of diabetes. In an accountable care model, there would be a significant investment in the preventive care needed to avoid the expensive amputation, obviating the hospital visit. In such a scenario, average diabetic care costs could be reduced to $20,000. The providers could keep a chunk of the $10,000 savings as a new form of revenue. Moreover, physicians who deliver such high-quality care would be able to earn bonus pay for improving care and reducing costs. The reward would no longer be based on consumption, which health maintenance organizations historically tried to restrict. Instead, the incentive would be for physicians to make decisions that improve a patient's condition early in the care process, to the benefit of patients, insurers, employers, and physicians alike.

Prescription: Commitment to Data Transparency

We all know that at times, the relationship between payers and providers can be less than optimal. That's why a commitment to data transparency among providers and payers is necessary in an era of accountable care. To develop a fully functional payer partnership, providers would need the capability to negotiate and manage contracts with payer partners and design aligned incentive systems. They would also need to collaborate with payers to manage population wellness and develop processes for exchanging population-level data with payers. Because payment will be based on performance, all parties within an ACO must agree to make data that shed light on performance readily available.

No matter what acronym is used, the concept of accountable care is no illusion. Our nation's healthcare system needs to move away from a
status quo that offers myriad known pitfalls for consumers and the federal budget. Accountable care has the potential to shift the focus from treating the sick to keeping people healthy-and healthcare IT will be key to this transformation.

If leveraged properly, this type of collaborative data sharing will have the potential to make people see that ACOs are not unicorns, but practical realities.

Keith J. Figlioli is senior vice president of healthcare informatics, Premier healthcare alliance, Charlotte, N.C. (

Publication Date: Friday, July 01, 2011

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