This is the health care delivery provider's part of the healthcare

marketplace specialization, this is module 1.4.1, what is an ACO?

So the learning outcomes for this lecture are review how ACOs or

Accountable Care Organizations got started,

and then discuss the overall guiding principles of an ACO.

Obviously, we'll be discussing quite a bit about the ACO, the Centers for

Medicare and Medicare Services, or Medicare, CMS.

This particular lesson deals with a new

paradigm that has emerged and is emerging in the United States in healthcare

delivery called the Accountable Care Organization, or the ACO.

Now it has been talked about for about a decade now,

but it is really coming in to mainstream over the last few years.

Especially with the federal government and the Centers for

Medicare and Medicaid Services, the CMS,

doing a lot of different experimentation in the ACOs across the nation.

So again, from a simplistic viewpoint,

an ACO is an organization that is accountable to somebody.

And we'll talk about who, and who's in the ACO,

who are they accountable for, and they're accountable for care,

for the population that is inside and attributed to that ACO.

So again, a very important concept in health care delivery,

it's a way of changing incentives, changing payments.

And as a result of that, it is leading to quite

a bit of transformation across the delivery systems from end to end.

So starting with a primary care physician, specialty care, urgent care,

ambulatory surgery centers, hospital, remember our map hospital.

Post-acute, transitional-care units, skilled nursing facility, home health,

community-based services, and back home.

So remember our value chain that Harlan flowed through,

an Accountable Care Organization type of a payment methodology or a way of being.

And organizing, a setting up of many different forces and

often, very positive, in a way to create healthcare value for

the patient, but more importantly for the entire population.

So let's start digging into what an ACO is, and then the rest of the lectures,

in this particular lesson will cover the nuts and bolts of how a ACO functions.

So I want to begin here with our familiar, delivery road map,

and at this particular point in time, for Harlan,

he was receiving services at many different care settings.

The clinic, the hospital, he went to home care, he went to a nursing home,

and all of those services potentially could have different incentives,

disincentives, could have different payments.

And so what would be one way of starting to organize this whole value chain so

that there is some coordination of effort to make Harlan's care better?

And so that's what an Accountable Care Organization does,

is to start lining up the various pieces of care delivery under one umbrella.

So that they all start pushing in the same direction, and

start improving the care of one particular patient, but also the entire

population that they are responsible for and that they take care of.

So here's a definition of an ACO, and

we will dig in to each of these phrases because they are all important.

So an Accountable Care Organization is a group of physicians,

hospitals, and other healthcare providers that come together

to provide coordinated and high quality care to their patients.

And the ACOs that do provide high quality care and reduce spending,

end up sharing in the gains and in the value that they create.

First, let's look at who makes up an ACO, so who is accountable?

Could be physicians or physician groups that come together, could be hospitals and

large health systems, could be post-acute providers.

And also, as we will see, many other health providers and

health organizations could come together to form this type of an organization.

And then we look at, who are they accountable to, they're accountable to

patients that they care for, and they are accountable to the third party payers.

So it could be a governmental payer, or a commercial insurance

company that they're accountable to and that manages and

shares the gains back with all of these providers that make up the ACO.

First, let's talk about the concept of coming together, so how will a physician

practice in a hospital and a nursing home come together to form an ACO?

Typically these are under contractual arrangements, so contracts are signed,

reviewed by legal, and all of these organizations come under that umbrella.

There has to be a very defined governance and leadership structure,

who makes decisions, who has what authority and powers.

Also there's organization of the operational units,

across all of these providers, that needs to be laid out in detail.

And then the infrastructure of data and

analytics across all of these providers, also has to be set up, and

that does take some doing, and does take some startup and infrastructure cost.

So we come to the very important concept of coordination of care, so

all of the players in the ACO need to agree and know who is responsible for

what and who is actually doing what for the population and the patient.

What is the information flow like?

Who needs to send information and what information to whom?

What is the case management philosophy, who are the case managers?

Who controls and owns them, who are they responsible for?

And then this very important concept of data and

analytics, so we can start collecting the data, but

there's this concept of putting the data together to have predictive analytics.

Who are the patients that might get sick in the next few months,

who are the patients that might get readmitted?

Who are the patients that might need to come into get a screening test?

And then this very important concept of the right patient

served in getting the right care, by the right provider,

in the right care setting, at the right time, and

again, to create value, at the right cost.

Let's do a quiz now.

Next we come to this concept of the ACO needs to create high quality care,

so as we'll discuss in the upcoming lectures, they are very defined and

preset quality metrics that are rigorously measured.

And then there is, as much as possible, a real time reporting and

that is quite challenging.

A real time reporting and then benchmarks so that the payer and

the ACO knows if it is behind or ahead of the benchmarks.

Finally, its extremely important and complicated concept of their patients, so

the ACO will take care of their patients, how do we know who those patients are?

So attribution, we talked about a little bit, but

there are quite a few challenges in attributions, and

attributing patients to ACOs, do the patients know they are being attributed?

Can the patients choose which ACO they belong to,

do the providers have any power in changing patients?

When the patients do change, does the ACO know in real-time which

patient is coming into their ACO and which patient is exiting?

And all of these present very real challenges in creating healthcare value.

The other concept, at least in the Medicare ACO, that is pretty strong,

is that the Medicare beneficiary or the elder, for example, has the absolute

right, at least for now, to choose any provider of care that they want to go to.

And that presents challenges because they could switch between ACOs and

even if they're attributed to an ACO, they could seek care elsewhere,

which is outside of that ACO.

This comes the concept of sharing in gains, so again,

the metrics are very similar, and we will see that in the next few lectures,

very similar to the triple and the quadruple aim.

There is a gate, the first gate is quality, so you must go through that and

reach the quality target before you get to the cost.

And if you beat the cost gate or the cost benchmark, you do share in the gains, but

quality comes first.

So in summary, accountability organizations are a group of healthcare

organizations that come together to provide coordinated,

high quality care to their patients attributed to them.

The healthcare providers and the ACO share in the gains by enhancing

the quality of care and by reducing the cost of that particular population.

1.4.1 What is an ACO?

Healthcare Delivery Providers

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