Since my brain is still on a holiday induced food coma, I am utterly reliant on sourcing excellent content from elsewhere on the web. You (my only reader) may recall some of my other elsewhere posts where I share things I am reading on other sites. A few weeks ago, I posted a tongue-in-cheek animation of a healthcare executive insisting that his organization form an Accountable Care Organization despite being inable to articulate what an Accountable Care Organization is. I was fortunate enough to be in a room full of senior healthcare leaders recently who were asked by a speaker to raise their hands if they were considering Accountable Care (or ACO). Everyone raised their hands. The speaker than asked people to raise their hands if they knew what an ACO was. Hands in laps.

While I suspect everyone was playing into the industry's inside joke, there is a bit of truth there: for a lot of us, ACO as a concept is poorly defined... or at least understood. And that is fair. There are not many models to look at yet.

In this video from Thomas Cassels of the Healthcare Advisory Board, there is some good talk about what ACO (and accountable payment) means. Now, its not exactly ACO 101, and for anyone outside of the industry it may still be jargon and babble. However, if you are interested in the structures and models that make healthcare systems tick, this may be just what you've been looking for.

Thomas makes the following points about the composition and requirements for an ACO (and I offer my quasi definitions):

  • Hospital / Physician Integration -  simply put, hospitals and independent physicians have to form a team, a partnership of care. The ebb and flow of who needs the other one more has to end, docs and hospitals are all in this together, will get payed together and have to work together to get there.
  • Information connectivity - Electronic Medical Records become a crucial part of an ACO. Imagine booking travel if each airplane didn't talk to the next. You'd leave home, get to your first stop and have to start booking all over before getting on the next plane (note, I'm not talking airlines, I mean individual planes) to your destination. We need a common, interconnected platform so that doctors can communicate about care across all points of care.
  • Clinical Transformation - This one gets tricky, so think of it as best practices meets quality control. Again with the travel analogy: pilots don't get to make up how they fly a plane, in fact it is fairly prescribed for a reason. There are best practices for flying a 747 and there are best practices for diagnosing and treating a torn ACL in the knee. They are fairly well established;  we need to make them available through decision support tools to physicians.
  • Payment Transformation - Did I say the previous one was tricky? Well this one is a doozie. Today, providers usually get paid when they see you. Like a mechanic gets paid to work on your car. The more often the car breaks down, the more they get paid. Under the ACO model, it appears providers will get paid as a team (see bullet 1) and based on outcomes. The thought is that will occur through betting on cost savings. The payor (medicare) says "here's $1,000 to care for someone for a year." Well, providers would proverbially name that care in 2 notes and say "ok, we'll do it for $800 and pocket the difference." Thats the prevailing theory at least...

What to know more? Watch the ABC video here, on their site: