Accountable Care Organizations Essay

Implications of the Accountable Care OrganizationAfter the Patient Protection and Affordable Care Act was passed on March 23, 2010, there has been a more renewed focus on expanding patient care hence, creating a network of providers and hospitals who are mainly responsible for providing quality care to patients. The Accountable Care Organization (ACO) was created to account for the perceived problems in the healthcare industry. It takes into account the safety of the healthcare industry and provides a value-based approach of healthcare where providers are paid based on their quality and the quality of care they provide to consumers.
?An ACO is a provider-centric organization which focuses on three main goals for specific population of consumer: reducing cost, improving quality, developing skills and resources? (Gerardi, 2011). Due to an improved preventive care services and disease management systems, the ACO has sought to reduce cost and prevent hospital readmissions, decrease excess use of ambulatory services and prevent the doubling of services that are present in the healthcare industry. It also seeks to improve quality ?through coordination of care and the existence quality-related, rather than transaction/volume-related incentive programs, as well as defining best practices through experience and evidence based medicine? (Gerardi, 2011). ACO will play a different role for consumers in that, providers who are within the network of ACO will be required to inform their patients to go to different doctors if they are unwilling to participate. ?Nevertheless, although physicians will likely want to refer patients to hospitals and specialists within the ACO network, patients would still be free to see doctors of their choice outside the network without paying more? (Gold, 2011).

Under the ACO, providers undertake a new financial risk together with additional financial compensations and benefits for delivering good quality of care to patients at less cost. ?In an ACO framework, providers would work together to minimize consumption of higher-cost services, become proficient in managing risk, motivate participants to take recommended actions to protect their health, and share among themselves the portion of total savings that the Centers for Medicare & Medicaid Services (CMS) decides to award them? (Reynolds & Roble, 2011). Use of?medical services is increasing, due to fee-for service payment methods that rewards providers based on the care provided? (Ansel & Miller, 2009). Nevertheless, ?there is lack of coordination of care due to numerous providers positioned at different settings who are all given rewards generate volume? (Ansel & Miller, 2009). This can result in inaccurate diagnoses, unnecessary treatments and increase hospital readmissions. Additionally, there is lack of or improper use of electronic information technology therefore causing poor disease management. There is a number of United States healthcare funding that is allocated ?for the management of chronic diseases such as COPD, congestive heart failure and diabetes and improper management of these diseases can result in over medication, readmissions and increased hospitalization which will increase cost as a consequence? (Ansel & Miller, 2009). Therefore, ACO?s addresses these utilization issues and ensures that providers are adequately rewarded for decreasing utilization while quality care is not adversely impacted.
Employers are similarly divided in terms of who can share in the savings and cost of the ACO. Under ?cost sharing, there is relatively even distribution between employers (18%), employees (15%), medical groups (23%), hospitals (22%), and health plans (21%)? (Hewitt, 2011). This equal distribution of cost sharing shows that, employers have a different understanding on health plans and they do not differentiate between types of providers in terms of cost. They are thus willing to implement and use available tools to promote and address the issues of cost; though, they expect employees to be better health care consumers. Hence, ?the implication is that employers will need to continue to assist employees to be more cost conscious health customers and make better health-conscious choices through consumer-driven health plans, high-performance provider networks, and cost transparency?(Hewitt, 2011).Since the ACO pays providers based on the quality of care they provide and make information on provider quality available to consumers, as a result, providers endeavor to deliver the best care with less cost. On the other hand, for employers, this means that insurers and providers will provide a more transparent clinical and medical outcomes, pricing and data since they are held accountable for the care they provide. Hence, ?this transition will require changes in organizational structure and operational workflow. In some cases this transition will require a major cultural transformation depending on the current state of the organization? (Hewitt, 2011).
Under the ACO, there are rules governing how insurers sell coverage. ?Health insurers are required by federal law to offer health insurance to any small business, but premiums in most states can vary within prescribed limits based on the health status of workers? (Kaiser, 2009). The ACO will require insurers to provide insurance coverage to all applicants without considering the applicant?s pre-existing health conditions. Thus, all individuals would qualify for coverage and the insurers would adapt to uniform ways for enrolling individuals in a health insurance plan.
Ansel, T., & Miller, D. (2009) Reviewing the landscape and defining the core competencies needed for a successful accountable care organization. Retrieved from
Gerardi, M. (March 2011). The ACA-driven ACO movement: Implications for emergency medicine.

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Gold, J. (2011). FAQ on ACO?s: , explained. Retrieved from
Hewitt, A. (2011). Accountable care organizations survey report. Retrieved from Aon Hewitt 2011 ACO Survey_FINAL.pdf
Kaiser Family Foundation. (May, 2009). Explaining health care reform: What are health insurance exchanges? Retrieved from
Reynolds, J., & Roble, D. (October 03, 2011). The financial implication of ACO?s for providers. Retrieved from


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