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November 26, 2014

ACO Update: An Opportunity for CME?, Challenges Ahead

Clinical Trials

In recent months, we have written about the expansion of Accountable Care Organizations (ACOs) across the country. An estimate indicates there are nearly 289,000 total healthcare providers and business personnel aligned with this new model for delivering care. Other studies indicate the number of patients in organizations with an ACO arrangement is between 37 million and 43 million, or about 14 percent of the U.S. population. We have also previously noted across the country, large hospital systems are buying up physician practices with the goal of becoming ACOs that directly employ the majority of their providers. Because hospitals usually have access to capital, they are better able to finance the initial investment necessary to achieve the quality benchmarks, like the creation of electronic record systems in order to track patients.

CME and ACOs

The growth of ACOs also provides an opportunity for the continuing medical education community. In a November article in Insurance News Net by Robert Meinzer, Theresa Barrett, PhD, and Ray Saputelli, MBA of the New Jersey Academy of Family Physicians, the authors argue that ACOs represent a “paradigm shift in healthcare,” and to build competencies necessary to deliver care under this new model, there must be a fundamental change in the way education is provided.

At their most basic level, ACOs and CME providers share similar goals. Both are stakeholders in improving patient and population care, and as a result, collaboration between the two is a natural fit. However, there are challenges. The article notes that ACOs are not like other organizations CME providers work with, so the education community must first understand how ACOs work before they can get these new organizations to buy into the idea that CME can help them achieve goals.

Challenges Ahead for ACOs

Hurdles between ACOs and CME providers are only one piece of the larger ACO puzzle. As we have previously written, despite the growing number of ACOs, this new model faces significant challenges moving forward. Currently, as one physician noted, there exists a “perverse payment model,” whereby the fee-for-service payment model rewards volume of services, not necessarily superior clinical outcomes. With more complicated procedures and treatment, providers are reimbursed at higher levels. Ultimately, ACO providers will need to aggressively convert their practices and revenue streams from fee-for-service to a prepaid model.

Additionally, technological hurdles prevent the successful implementation of ACOs. While ACO technology platform solutions can be both simple and difficult, ACO providers must invest in connecting their information technology systems early on to prevent redundancy of care. Physician leadership and self-governance is also important when success depends on improvements in operational performance. Hospital administrators, for example, need to embrace physician leaders as equals while investing in physician leadership development.

Promise and Peril of ACOs

The benefits and challenges faced by ACOs were also recently discussed by Fred N. Pelzman, MD. Dr. Pelzman walks through a number of important topics involving ACOs. In the implementation stage, he describes the underlying pieces that must exist in an ACO and are already found in patient-centered medical homes. He cites safe transitions of care, robust information technology tools to monitor health trends, evidence-based care, and care coordination as four examples.

He argues, however, if a patient-centered medical home model is used to build an ACO, there must be additional infrastructure and support to coordinate care and stop excessive spending. One positive of this model is that an ACO built at an institution already providing patient-centered medical care will have pieces in place to create the best possible care, limiting redundancy and possibly improving transitions of care.

Dr. Pelzman further compares and contrasts patient-centered medical homes to an ACO model, noting that patient-centered medical homes build care coordination into their practice. This allows care coordinators to ensure patient care is delivered as planned and additional services are supplied effectively. Under an ACO model, Dr. Pelzman argues the world of care coordination would increase “massively,” becoming a major focus of care teams. He describes the point of ACOs as seeking to identify high-risk patients that need reductions in duplicate care, prevention of defensive medicine, and implementation of high-quality interventions.

But his concern is that ACOs would then become yet another monitor looking over the shoulder of caregivers, scrutinizing what they spend while caring for patients and telling them what can and cannot be done to provide care. Right now, bureaucratic hurdles already overwhelm the system, Dr. Pelzman points out.


Dr. Pelzman ends his article by noting that when money enters the picture of care and becomes too significant of a presence, it has the potential to take physicians away from the most important goal: caring for patients.

If ACOs are to benefit patients, he argues they must ensure for evidence-based care to prevent unnecessary emergency room visits, prevent patients from doctor-shopping, and keep them within systems where caregivers can better take care of patients. Dr. Pelzman acknowledges there is a business side to healthcare—ultimately someone is responsible for the bottom line—but when that becomes too much of a focus, there is a fear that linking the practice of medicine to the sometimes messy nature of healthcare delivery, with the goal of saving money, may create a paradigm where practitioners are pressured to avoid providing care they think is necessary and appropriate.

Ultimately, Dr. Pelzman provides a final warning: “But we are scared of having Big Brother look at everything we spend on our patients, because someone is always going to be worried that this is going to make us lose money.”

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