ORLANDO—The rise of accountable care organizations (ACOs) continues to cause uncertainty in the medical field, but a group of experts gathered at the American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) Annual Meeting for a panel discussion to try to give guidance—and, if possible, soothe anxieties—about this aspect of the changing medical landscape.
Explore this issue:November 2014
Gavin Setzen, MD, secretary-treasurer of the AAO-HNS and president of the New York State Society of Otolaryngology, said that the quickly expanding number of ACOs make them entities that must be considered. There are more than 600 ACOs that include more than 14 million patients, and 20% of Medicare ACOs were created by academic medical centers. “And that’s likely going to continue to increase,” he said.
Although analyzing data properly is a costly undertaking that requires extensive infrastructure, the data is indispensable when it comes to participating in an ACO, he said. It’s essentially the heart and soul that drives decision-making. “Technology is going to enable successful participating,” he said.
The decision on whether to join comes down to a thorough, honest assessment, Dr. Setzen said. “If your practice considerations and environment are stable and you have good financials, a healthy IT platform, [and] excellent referral sources, [and if] ACOs are not a major threat in your community and your SWOT analysis says, ‘keep doing what you’re doing,’ [then] keep doing what you’re doing,” he said. “If those market factors and other forces are transitioning you towards an ACO, then that’s a consideration to take advantage of.”
Lisa Dillon, MD, MBA, senior medical director at Advocate Physician Partners, based in central Illinois, who has been running that ACO for three years, said that with the “shared savings” model, which requires more robust data analysis but returns lower income—a deal that is “very good for the payer”—it appears that “we’ve added a lot of cost for the ‘privilege’ of making less money.” Strange as that might seem, it makes sense, she said.
“We see shared savings as a transitional model,” she said. “Shared savings is a stepping stone to taking on capitation and prepaid contracts and then actually offering an insurance product…. This is where we think we’re going.”
She added that a lesson from manufacturing shows that it is possible to increase quality while decreasing cost, by cutting down on variation that doesn’t contribute to a product’s value. For example, if a surgeon or hospital more routinely performs according to what she called Episode A (fewer tests, hospital stays, and other expenses) and less often falls into Episodes B or C, with more expenses, including skilled nursing and home visits, then those surgeons and hospitals are used as models to follow.