ACOs Not Scaling Well, But Health IT Helps

ACOs were billed as the next big thing in healthcare, a model which would create economies of scale and tame rising costs of care. In theory, unifying hospitals and doctors into an overarching entity – and creating shared clinical and financial goals – should improve care and boost efficiency.

Of course, creating them doesn’t come cheap. In fact, creating even a modest ACO typically calls for between $1 million and $3 million in capital investment, according to Michael Deegan, MD, who recently developed a course on ACOs for the University of Texas at Dallas. It also takes 18 to 24 months to launch an ACO, Deegan told an interviewer at UT.

But once all of the Ts have been crossed and the Is dotted, ACOs can meet their stated goals, right? Actually, not so much, though health IT can help things along, according to Indranil Bardham, a colleague of Deegan’s at UT Dallas who serves as professor of information systems.

According to an article in HealthcareITNews, Bardhan recently completed a study on ACO performance which concluded that health IT had a measurable impact on their efficiency. The study, which drew on 2013-2015 data from CMS, reviewed the performance of 400 ACOs.

Among the key takeways Bardhan took from his research was that the larger an ACO was, the more likely it was to be inefficient. This flies in the face of conventional wisdom, which would suggest that bigger is better when it comes to improving efficiency.

On the other hand, health IT use had the effect its champions might hope for, though modest in scope. The study concluded that a 1 percent increase in HIT usage was associated with an 0.5 percent increase in ACO efficiency.

The thing is, these measures represent just a couple of ways to evaluate ACO performance, making it hard to tell just what is working, Bardhan told HIN. “Healthcare, with respect to ACOs, is fascinating because there is not just one single output measure that you are using to compare performance,” he told the magazine’s Bill Siwicki. “…It is difficult to measure the performance of organizations against each other when you have multiple outputs that cannot easily be transformed into a single dollar number.”

This squares with commentary by other ACO researchers, who seem to agree that the whole ACO evaluation process is a bit mysterious. As health policy analyst David Introcaso notes, in a review of ACO-based Medicare Shared Savings Program, CMS isn’t helping either. “While CMS details financial and quality performance results, the agency does not explain, at least publicly, how results, favorable or unfavorable, were achieved.”

Without knowing more about what we should measure, and why – much less what steps helped in achieving their results – it’s too soon to tell what type of health IT should be deployed in ACOs. But looked at more optimistically, once we have a better idea of what ACO success factors are, it seems likely that health IT tools will help execs address them. (For a look at one completely health IT-based ACO concept, see this piece on the Virtual ACO.)

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

1 Comment

  • Does anyone else think that CMS is running around with their eyes and ears covered, beating a dead ACO horse? The ACO program is dead. Lets all get over it. Accountable Care is the reincarnation of the HMO. Lets get real here. When you are paid more for less care, it becomes obvious to the patient and caregiver. Play it out to the end. Just like bundled care. Do you think we are going to do joint replacements on people that are at increased risk of problems that will “cost” the bundle? Play it out. No way. I cannot understand why CMS cannot let go of a buzzword program that they “innovated” but is failing consistently across the country….even Dartmouth the original gangster of the ACO (remember they made it up, thought they were so smart and great, but could not make it work), they quit theirs last year. They have tried all the tricks, certEHR requirement (when it would be MUCH better to have custom EHR), say that the longer you are in it the better (turns out, nope). And OMG, the larger, academic centers definitely cannot make it work, so their must be something wrong with the program. Its funny how big corporate medicine cannot seem to do as good a job as those of us still out
    here independently practicing in a small practice. ACOs never, I mean never, count the costs of actually implementing, maintaining, or running the program in their figures. So its a total lose lose at this point. Again, maybe CMS should stop penalizing those of us that are still efficiently and with high quality, seeing their patients, without all the games of ACO/APMs etc. Maybe its time to stop trying to make Walmart out of medicine and go back to the local shop where you actually know you MD.

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