With the changing legislative and regulatory landscape in the US over the past many years, there has been a lot of talk around the emergence of Accountable Care Organizations (ACOs – defined below) and the greater role they will play in the future. Hopes are high that these organizations can help to right some of the compounded wrongs in the industry. First things first, I think it is useful for us all to gain some greater clarity behind what an ACO is – a term that is still relatively new to most of us, having first been coined in 2006.
Here goes at the 101 level. An Accountable Care Organization is a group of doctors, hospitals, medical groups, or other health care providers who come together voluntarily to provide coordinated care to the patients they serve. Participating professionals are held responsible for the quality and outcomes of care for their patients through an incentive structure that potentially penalizes the bad (e.g. hospital readmissions) and shares the good (e.g. cost savings). Also, an important distinction is that an ACO is not a health insurance provider and it cannot tell a patient which providers to see (vs. HMO or managed care program) – again, participation is voluntary on both sides. The simple goal is healthier people at reduced costs.
ACOs have proliferated in the US since 2010, as shown below, and indicators point to this trend continuing and ACOs being the poster child in the US’ evolving “fee-for-value” (vs. fee-for service) care delivery model.
That said, leveraging digital technology is a key driver to building pooled / coordinated care loops and to capturing cost savings within the ACO model. Digital health companies building electronic health record systems, healthcare communication tools and population health management platforms will all likely serve an important function and I recently came across two articles I want to share discussing teleHealth’s emerging importance to ACOs that inspired me to write this post.
The first highlights a teleHealth (aka MHealth) use case for an Indiana-based ACO. This ACO is using teleHealth tools (Honeywell’s digital health suite) to connect providers and home patients in a program that has been shown to reduce costs, improve patient health and qualify the ACO for shared-savings incentives. Win. Win. Win. This quote from the article sums it up nicely: “The key takeaway is that mHealth programs like The Coaching Program can help providers and ACOs not only reduce hospital readmissions among their most expensive populations, but they can demonstrate an improved quality of life for those patients and optimize new revenue streams.”
The second, although not as sexy in content as the first, discusses the need for antiquated regulations surrounding teleHealth to change. Upon realizing teleHealth’s value in helping to satisfy their own strategic goals, ACOs have recently (and rightly, in my opinion) joined the lobby with other interest groups, businesses (including Intel and Qualcomm) and health companies.