3 Strategies to Become an ACO

The early experience with ACOs has not been very good. The cost of implementation has been higher than expected, and population health management has been difficult to achieve. Data released last October showed that out of 220 CMS ACOs, only 52 were able to share savings, and 115 ACOs had no cost savings. The CMS ACO spend was reduced by a paltry 1%.

So why were the results so underwhelming? It was harder to reduce costs than expected. Low hanging fruit did not exist. The outcomes could have been better if they had deployed these three important strategies.

1. Culture Change. The fundamental relationship in risk-based payment schemes is that of quality and cost. As quality goes up, costs go down. The way you improve quality is by elimination of variations in care at the clinical level. This requires clinicians to work in teams based on standardized protocols developed in your institution. No more “craft of medicine”.  

Culture change is not easy. Unfortunately, your clinically integrated network does not define a culture. We learned from Dr. Deming that to change the culture of an institution, one needed to identify the numbers of leaders in the organization and train the square root of that number in quality improvement. This takes time and resources, but there is no way around it. The rewards are worth it.

2. Actionable data. At HIMSS last year, there were over 600 firms that identified themselves as providing “data analytics”. Most assuredly, the great majority are selling benchmarking. That is not what you need in the ACO world. Comparing clinical outcomes amongst doctors in your ACO does not tell you how many of your patients are up to date on their pneumonia vaccinations.

The data drives the clinical activity. It must be timely and accurate. You cannot manage large populations using paper reports that are 6 weeks old. An upside is that the right data at that right time helps you engage your clinicians. They respond to data.

3. Ease into the ACO world using bundled-payment programs. It is a great way to engage clinicians in higher quality, lower cost healthcare because the clinicians can take on relatively minor risks while learning case-by-case. As you are learning to eliminate waste in the clinical enterprise, you are saving dollars that can be redirected toward your population health platform.   

We have learned quite a bit from the early experiences of accountable care. Perhaps we should view ACOs and other population health models like a marathon and not a sprint. Take the time to do it right before you get into risk based models, and you will do well.

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