If you’re in healthcare, then you understand the monumental implications of the Patient Protection and Affordable Care Act (PPACA). But what we found most fascinating is the sudden interest in Accountable Care Organizations (ACO); although only seven out of 900 pages in the law are dedicated to ACOs, everyone seems to be scrambling to form one as quickly as possible. In recent months, both the government and well-respected think tanks have been hailing ACOs as a very viable first step to solving the nation’s healthcare woes. But what is an ACO? And more importantly, how do we sell ACOs to a public that’s grown weary and skeptical of healthcare reform initiatives?

In this series, we’ll discuss those questions, delve into marketing best practices and try to pull in real world examples from organizations that have made the transition to an ACO structure. But first, let’s talk about ACOs in general, just to make sure we’re all dancing to the same tune.

What is an ACO?

An ACO is a network of healthcare providers—including specialists, physicians, hospitals, clinics and even insurers—who agree to coordinate in caring for a patient, sharing responsibility for his or her health. The main goal of an ACO is to tie reimbursements to better outcomes and reduced care costs, as opposed to the volume-driven model favored in the United States today. Most ACOs are trying to accomplish this through information sharing and better coordination among providers, promoting preventive medicine and thus cutting back on unnecessary procedures

Why ACOs? Why now?

Although ACOs have been around in one form or another for years (see below), they only entered the national healthcare conversation after the passage of the PPACA. Traditionally, Medicare operates on a fee-for-service model, where providers are paid by volume; under an ACO, providers are paid more by keeping their patients healthy and out of the hospital.

The Department of Health and Human Services is hoping to cut back on Medicare costs by placing some of the fiscal responsibility on healthcare providers, incentivizing them to control costs while improving health outcomes. Participation in the Medicare Shared Savings Program (MSSP) is key to this initiative. According to the implementation of ACOs and the MSSP in the PPACA, those that cut costs while maintaining high quality standards would keep some of the savings; however, if an ACO is not able to cut costs, the ACO would be left to recoup the initial investments they made to raise care quality.

So where did ACOs come from?

The idea of achieving better outcomes through coordinating different providers is not new. The roots of an ACO can be seen in:

1. Patient-Centered Medical Home (PCMH):

The PCMH is “a team based health care delivery model led by a physician that provides comprehensive and continuous medical care to patients with the goal of obtaining maximized health outcomes,” according to the American College of Physicians and the American Academy of Family Physicians. The concept was first developed in 1967, although the first notable implementations were not developed until the early 1990s. Roughly speaking, PCMHs are ACOs in all but terminology; in fact, an ACO can be considered to be nothing more than a coordinated collection of PCMHs. Noteworthy PCMHs include Community Care of North Carolina and the Rhode Island Chronic Care Sustainability Initiative. In addition, organizations like UnitedHealth Group, CIGNA and Geisinger have initiated PCMH evaluation projects.

1. Health Maintenance Organization (HMO):

First instituted in 1973 with the Health Maintenance Organization Act, ACOs seem no different from HMOs at first glance. However, there is one crucial difference—in an HMO, the primary care physician (PCP) acted as a gatekeeper, limiting the patient’s access to specific services and providers. Furthermore, the PCP could issue referrals only if the HMO guidelines deemed it necessary, often ignoring the doctor’s own best judgment. In both an ACO and a PCMH, patients are not limited to the provider’s referral pattern, giving them much more control over their healthcare options. They can, for example, go straight to a specialist without a referral.

So how does the patient benefit? 

Strictly speaking, the foremost benefit is better overall health. By emphasizing preventive medicine and incentivizing quality over quantity, patients should experience improved outcomes and superior long-term benefits. Furthermore, proper care coordination should eliminate inconveniences like lost or inaccurate medical charts and duplicate procedures.

But! These benefits can be difficult to communicate; after all, telling folks that they’ll be healthier down the road isn’t nearly as easy to sell as the latest and greatest medical technology. In addition, healthcare reform and the PPACA is very controversial in certain regions, and many people might view ACOs as just HMOs with a different name. But these hurdles can be overcome. In our next blog in the series, we’ll talk about how to avoid potential pitfalls, and what we consider to be best practices in ACO marketing.

Have we missed anything important? Do you have any information about ACOs that you’d like to share? Tell us all about it below! We’d love to chat.

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