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Lessons Physician ACOs Can Learn from Hospital ACOs

Three years in, the evidence in favor of the cost-effectiveness of the accountable care organization (ACO) model of healthcare service delivery has been piling up. A recent assessment of ACO performance showed that those that joined the Medicare Shared Savings Program reduce Medicare spending by about $144 per beneficiary. Although it’s independent primary care groups that exhibit greater savings than hospital-integrated groups — and we’ve covered the lessons hospitals can take from them — hospital ACOs, too, have much to offer. Here’s a look at three lessons physician ACOs can learn from these hospital-integrated structures.

1. Expand access

The formation of hospital ACOs naturally arises out of previous relationships between primary care practices and hospitals. In a study, 75% of ACOs with hospitals expressed having a relationship between primary care and the hospital before ACO formation, either contractual or informal, which meant that there were pre-existing referral patterns and cooperation already in place. This lets hospital ACOs find ways to refine the communications networks to improve them in the ways needed to maximize rewards from the Centers for Medicare and Medicaid Services (CMS). In addition, having a large, cooperative network can make it easier to welcome in new partners, further expanding access, remedying disparities in healthcare access, and meeting healthcare needs and delivery of medical services for broader swaths of the population — in particular, populations facing more barriers to care due to racial, ethnic, geographic or socioeconomic reasons. Hospital ACOs are perhaps better-positioned initially to balance competition and collaboration to provide integrated care, developing partnerships and pathways to provide pharmacy, primary care, urgent care clinic and hospital services, preventing patients from needing critical care, inpatient stays or readmissions.

2. Leverage data

Within hospitals, it is important to harness technology to capture patients falling through the cracks and to streamline their care journey; to open up communication between providers, as well as between providers and patients, particularly through improved access to documentation; and to use patient feedback to learn which logistics (such as location of pharmacy or layout of a medical building) make it easiest for them to obtain care. All these steps rely on the collecting, usage and sharing of good data.

An analysis of ACO composition and its effects found that hospital participation led to improved patient data sharing between inpatient and outpatient settings, such as discharge summaries or alerts for an ACO patient admission or emergency department visit. Many of the ACOs including hospitals reported having systems or processes in place to share patient information between the hospital and providers outside of the hospital, leading to non-hospital providers more consistently receiving patient information from hospitals. These abilities encourage more flexible, efficient, outcome-oriented use of data analytics to create opportunities for better care.

3. Make use of access to financial resources

Hospitals tend to have deeper pockets than independent groups, thanks to the volume of care they provide, and therefore can be an advantageous source of capital to an ACO for funding activities such as creating technology infrastructure or carrying out data analytics. Hospital funds can also be used to hire staff that join up services and coordinate care. Essentially, before the advance payment model rewards payments start rolling in, there’s capital to invest in care improvements — which helps to mitigate the fiscal risk that independent groups may face more acutely. Combining financial resources, expanded data sharing and the ability to engage care settings across the continuum means that hospital ACOs are better able to control both quality and the total cost of care. “The participation of a hospital [is] an indication of the alignment of financial incentives across settings to improve coordination,” write the authors of the ACO analysis, echoing the philosophy of CMS and national think-tanks. The path to better care is, after all, the same as the path to more cost-effective care.