The ACO Reality

When the Accountable Care Organization (ACO) concept first came into being with the passage of the Affordable Care Act (ACA) there was a ton of skepticism as to whether it would ever become a reality.  There were many people in our industry who thought the idea would never happen and they refused to begin planning for the role they would play in the future.  I pushed against this doubt so hard that I thought of that old prayer that says, “Lord please let me always be right because you didn’t make me smart enough to know when I am wrong”.  Concerns were really raised when many leading institutions came out against the CMS draft regulations and said they would not be participating.  CMS listened, changed the rules and the movement began.  Today the prognosis for ACOs has clearly changed and there are very few people who don’t feel this will be a critical part of healthcare going forward.

The most recent views on ACOs can be summarized in this HealthBlawg written by David Harlow.  This has become one of the most exciting movements in the healthcare world with over 150 ACOs now approved by CMS and approximately that same number working with private commercial payers.  There are hundreds more in line for approval and CMS should now easily reach its goal of 270 organizations within three years.  These groups clearly are an important tool for helping the CMS Innovation team attain its “Triple Aim” mission of better health, better healthcare and lower costs through improvement.  The real beauty of the ACO concept is that they win or lose financially based on how they perform.  They definitely have skin in the game.

If you haven’t followed the ACO movement over the last couple of years, now is a good time to catch up.  There are tons of review articles out there on what is good about the movement and what concerns still remain.  Perhaps now is the time to start asking questions internally about how this movement will impact your business. Where do the drugs fit into the system?  I will give you a clue that this could be very positive.  How does the ACO world fit in with everything else going on in healthcare?  Which customers are for it and which might get hurt?  What are the financial incentives and what are the differences between the various options?  Half of the program is about quality measures.  How do our drugs impact these and which measures are most important for our products?  How should we work with and market to ACOs and who are the decision makers?  Who in our organization will have primary responsibility for ACOs and who will be coordinating the efforts?  What are other companies doing about this and will this change the competitive landscape?  I would say at this point for most in the industry there are more questions than answers, but that is what makes it exciting.

Perhaps the best thing about the ACO world is that it is movement in the right direction.  We spend so much time criticizing the healthcare system discussing abuse, waste and fraud.  It is refreshing to see something that tries to counteract all of these problems.  It is so “free market” to allow the private sector to make improvements and then be able to share in the financial savings.  The challenge is extremely big, but big challenges inspire big thinking and big plans.  Last century we worked together to conquer space and perhaps we can put that same effort into fixing our healthcare system.  The closer you get to customers and to the inner workings on healthcare the more you see how much work is really needed.  I for one am betting on the ACOs to begin turning this around.  Better health, better healthcare and lower cost through improvement.  It kind of makes sense, huh?

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