Accountable care organizations (ACOs) and value-based purchasing arrangements will be responsible for the care of 130 million patients by 2017, predicts a report by Parks Associates. Accountable care will generate nearly $1 billion in revenue for healthcare providers in 2014 as they transform into ACOs and patient-centered medical homes (PCMH).
“Reforms to the healthcare financial model tie compensation to care outcomes, and ACOs, built on the coordinated care model, align well with this new emphasis,” said Harry Wang, Director, Health & Mobile Product Research, Parks Associates. “Parks Associates defines ACOs in the broadest sense to include Medicare ACOs, private-sector Patient-Centered Medical Home practices, and healthcare providers that accept a pay-for-performance arrangement with private and public payers.”
With the Affordable Care Act (ACA) in full swing and a large number of formally uninsured patients already accessing primary care, healthcare providers are ramping up their efforts to seek methods of containing costs, squeezing out waste, and adopting new payment structures with the help of the nation’s largest payers and other leadership entities. The Electronic Healthcare Network Accreditation Commission (EHNAC) recently announced the beginning of a new program certifying ACOs, while the PCMH designation is becoming increasingly popular with both providers and insurers.
Blue Cross Blue Shield of Michigan has claimed certified savings of $155 million over the first three years of its PCMH designation program, generated largely be prevented readmissions and shorter hospital stays, while UnitedHealthcare has cut the cost of cancer treatments by more than a third with novel bundled payments, and the Medicare ACO program saw shared savings top $380 million in just one year of operation.
New ACOs are cropping up all the time across the country as providers take the risk of shouldering financial responsibility for patient outcomes in exchange for significant rewards, but a successful accountable care strategy relies on health information technology that not all providers have. As EHR adoption reaches the saturation point, many providers are just beginning to invest in clinical analytics, population health management, and patient engagement tools that will set them on the path to true accountable care.
“The digital health markets need to develop business models that make sense while organizations are transitioning to these different care reimbursement models,” said Sandra Elliott, Director, Consumer Technology and Service Development, Meridian Health. “Health and technology providers should focus on providing end-to-end scalable solutions that offer financial benefits to purchasers while showing value to patients as individuals by enabling them to live their life to the fullest, thus encouraging strong consumer engagement.”