Custom «Accountable Care Organizations» Essay Paper Sample

Accountable Care Organizations

Accountable care organization, (ACO) refers to a group of specific medical care providers who offer services to a specified patient population and they have to account for service quality and costs incurred during their services. This group could include a set of doctors, hospital, specialized personnel, and primary care providers. In working as a group, they share responsibilities to ensure a patient population gets the best of services. According to AcademyHealth, (2009), “A single ACO could be quite large and cover thousands of patients. Hospitals are not a necessary part of ACOs, but may be a desirable feature,” (p. 2).

Upon establishment of an ACO structure, patients should get medical care as the sole discretion of ACO, which has to ensure that care is given according to prescription. A well-managed ACO system gives financial rewards to participants for meeting the prescribed targets. On the other hand, an ACO may opt for voluntary or mandatory service provision. But the greatest challenge of implementing the ACO programs is the legal debates. ACO designs are not easy to streamline using a specific set of rules because they vary.   

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Aim of ACO is to deliver excellent services via a well-coordinated system and as being mentioned, bonuses are awarded to ACOs that achieve intended results while those that fail are penalized. Superior service delivery will ensure the following;          

  • Medical services to patients with diverse needs for health services using a number of institutional settings to offer the services
  • Comprehensive financial plans based on available resources and resource needs
  • Offer sustainable, all-inclusive, and reliable services to measure to intended level of service

ACO gives a new concept in medical service delivery and according to Devers and Berenson, (2009) “The concept driving ACOs is that it is providers, who are best placed to make changes that will address cost and quality problems resulting from U.S.’s current system of fragmented care, variation in practice patterns and volume-based payment systems.” The system in its current form allows for flexibility in the development of organizational models and procedures for payment that match the needs of a given population of patients. This specification and nature of ACO systems makes it superior.

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The National Committee for Quality Assurance’s (NCQA) that is obligated with the responsibility of ensuring there is quality in delivering health care services initiated the program. NCQA in its 20-year existence has sought to identify areas in which the American experience of health care services can be improved. The body is responsible for certification and accreditation of a number of health care organizations based on performance standards as contained in Healthcare Effectiveness Data and Information Set, (HEDIS).

The platform under which ACOs work is to improve patient experience of medical care at relatively lower costs by employing quality services of providers. As noted by National Committee for Quality Assurance, (2010), “How providers organize themselves as accountable entities is expected to vary based on existing practice structures in a region, population needs or local environmental factors.” The philosophy of ACOs is to provide a platform on which a selected number of participants can come together and upon meeting a given criteria, offer services at an affordable cost to reduce burden on health insurance programs like Medicare. A number of legal and operational complexities mar achieving the triple objective of ACOs. NCQA struggles to identify measures of attaining the triple aim of ACOs and as National Committee for Quality Assurance note, (2010), “NCQA believes performance measurement must be a growing part of ACO evaluation but that for a variety of reasons it will take some time before organizations can be primarily judged on the outcomes they achieve.”

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Laying a firm structure is a concern for the NCQA due to their experience with the dynamism of evaluation processes of health care institutions. Providers who are willing to form an ACO should begin building their capability and as noted by the NCQA, some groups have people who understand the procedures and that gives hope of achieving competency and stipulated within the triple aim. The financial success of ACOs will depend on how participants are organized, ability to coordinate various parameters of service delivery, and how well patients are involved in the programs.

The NCQA has the drive to ensure that there is successful formation of different groups under the ACO banner. In this regard, the body aims at setting standards to guide participants towards full implementation of ACOs. NCQA set up a task force to that consisted of national figures to develop the standards. The body is however cautious and hopes that any needs for amendment of the provisions would be easy to deliberate on at ACO levels. For instance, it would be easy to review the process of managing in-patients to a new home-based care management system more easily at the ACO level.             

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Issues under ACO Discussion

Despite the many attempts by research scientists and legal proceedings to streamline the broad concept of ACO, there is still need to discuss specific programs that the system offers. These decisions will affect how the programs are designed, implementation issues, and cost cutting measures in both the long term and short term. Pace, scale, challenges, and other support programs determine failure and success of the implementation phase. Proposals to streamline the ACO programs depend on five main issues,

  1. The design type of ACO
  2. The type of participants involved (whether the services are on voluntary basis or mandatory)
  3. How to bring in patients to the program
  4. The procedure to be adopted in payment
  5. The way of assessing quality

Legislative proposals before the Senate have a wide definition of ACOs due to standoff in reaching a consensus because there are many design issues that would not allow a single definition. This standoff requires the testing of a number of ACO systems with regard to design. To begin with, it is in order to specify whether physicians, who are the main, should head ACOs. Most certainly, physicians should form party of the programs but this will be challenging for small groups. This is because small groups may not be sound enough to subject them to thorough accountability measures and cost reduction mechanisms as applied in the wider continuum of medical care.

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Another legal proposal would be the inclusion legal provisions for other institutions that work hand in hand with ACOs. For instance, there should be clear statement of whether the participation of hospitals is mandatory or that their services be collaboration. Partnership between physicians and hospitals should however, address the needs of the community that will benefit from the services. The criterion to qualify an ACO program also needs to preside over participation, for example, footing structural minimums and maximums with regard to number. The intent should be sustainability of a potential ACO program within a local setting. Services by ACOs should take cognizance of possible conflict with other medical service providers in a location. When there seem to be conflict of interest, legal proposals should avert crisis and seek ways of making ACOs and other medical care providers, work in complementary platform.     

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With regard to either voluntary or mandatory participation, Devers and Berenson, (2009) observe that, “voluntary ACO programs offered by established organizations might initially have a higher likelihood of success and require fewer resources to administer its impact on health care delivery across the country.” The assertion on mandatory program is that it will have significant impacts on cost reduction and ensure quality of service. Mandatory participation assign service providers to a given administration mechanism based on claims analysis of previous data. This success of mandatory participation will depend on ability of providers to adjust their practice patterns.

Payment Methods and Patients’ Participation

Patients’ participation level should also be an issue that the legal proposals need to address.  There are three vital concerns to address in patients’ participation: whether there their freedom of choice should be limited or unlimited. It is important that patients remain confident with the services as designed by physicians will address their main concerns and problems. Patients participation will also be influenced by the freedom of choice from various providers and as such, they should have a strong relationship with physicians. A strong relationship will also be beneficial in determining the most relevant medical care services.

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There are two proposed legislative measure to streamline the ACO payment methods. These are;

  • Population-based program, (PBP)
  • Shared savings program, (SSP)

Legislative proposals should allow for the testing of each of the methods, as both are relevant. The cause of disagreement lies in notion that one would be superior to the other under different circumstances.

Avenues for Assessing Quality

A successful ACO system should lay emphasis on provision of quality services at affordable costs as the primary goal. This means that assessment of ACO should focus on two key parameters, costs and quality. It would be easier for a group of 12 physicians to debate on most effective methods of ensuring quality by setting up benchmark indicators as standards. For a group of 12 physicians, it would also be easy to monitor the delivery of services of not only individual providers but also overall group members. To be included in the overall assessment procedure are measures geared towards the coordination of joint service provision instead of individualistic concerns. The merit of measuring quality at the level of ACO is because there will be enough data to support statistical legitimacy of a given set of quality.

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Potential Challenges

With an intent of forming an ACO group, it is critical to note potential challenges that may curtail efforts proper implementation of a given design program. Most ACO designs do not offer modalities for participation of privately sponsored payers but those funded by insurance institutions and Medicare programs. A section of stakeholders in the program opine that a coherent relationship between participants and nearby hospital may relent power to ACOs and this is likely to compromise low costing charged against private payers.

The other challenge is the emerging roles of government bodies and participating providers. ACO brings in a new kind of medical service provision that will need initiatives to develop and sharpen skills. Policy development is two folds, dealing with the overall ACO programs streamlining and proposals to safeguard new approaches of ACOs. “ACO will need the capacity to support cultural change, teamwork, health information technology, and care management while also strengthening managerial and physical leadership,” (Devers and Berenson, 2009). 












The case of ACO presents a new dimension in health care service delivery, which is the main obligation of NCQA. The body aims at providing better health care services by devising ways of enhancing the effective services. It is on this basis that ACO was launched. From the discussion, the ACO experience is set to revolutionize the experience of offering medical services to patients because of the systems’ focus on three main goals, also referred to as triple aims. The greatest challenge to the scheme however lies in the legal setting. It is hard to streamline ACOs because of the many ACO designs that have different legal proposals.

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