ACO Implementation
Time Frame for Implementation Section 3022 of the Affordable Care Act (ACA) includes Section 1899, the Social Security Act. In this section, an addendum was created that there must be a formation of a Shared Savings Program. The Shared Savings Program is groundwork for the ACO (Department of Health and Human Services, 2011). The Shared Savings Program is part of the timeline for implementation of affordable healthcare in America (The United States House of Representatives, 2010). The United States House of Representatives penned an implementation time line to improve the healthcare environment and decrease overall healthcare expenditures. ACOs, which are part of the integrated healthcare system, were encouraged to be in place by 2012.
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The goal of encouraging integrated healthcare systems is to “gain efficiencies and improve quality” (The United States House of Representatives, 2010). ACOs are a voluntary program; therefore, HCPs may chose as to whether or not to become an ACO provider. Implementation within the timeline is challenging because restructuring for HCPs and organizations requires intense preparation and risk management.
Barriers to Implementation There are a variety of barriers and concerns regarding ACOs and the care provided to individuals that will fall under the umbrella. One major concern is “that ACOs will focus narrowly on their bottom line and either stint on needed care or use the leverage they achieve local integration to demand unreasonable prices from payers” (Fischer & Shortell, 2010). If this would to occur, large medical organizations working together under the ACO could reflect a monopolistic system in which it would drive up prices and leave small organizations unable to provide services in the community. A second issue is a challenge that lawmakers and policy makers are having in regards to regulation of ACOs. The challenge is to quickly implement an ACO program with accountability for HCPs and healthcare organizations with already established measurement approaches. Not only is the challenge current measurement but the need to advance the measurement structures and systems to ensure ACOs are functioning as intended and improving healthcare spending (Fischer & Shortell, 2010). Third, there are numerous risks identified with the implementation of ACOs. As stated by Singer and Shortell (2011), experts in ACOs, have identified the following 10 risks when implementing ACOs:
1) “Overestimation of ability to manage risk”
2) “Overestimation of ability to use electronic health records”
3) “Overestimation of ability to report performance measures”
4) “Overestimation of ability to implement standardized care management protocols”
5) “Failure to balance the interests of the hospitals, PCPs, and specialists in creating governance and management process to adulate differences”
6) “Failure to sufficiently engage patients in self-care management and self-determinations”
7) “Failure to make contractual relationships with the most cost-effective specialists”
8) “Failure to navigate the new regulatory and level environment”
9) “Failure to integrate beyond the structural level”
10) “Failure to recognize the interdependencies and therefore the potential cumulative ‘Race to the bottom’ of the above mistakes”
The above risks could of course be further discussed in depth; however, the important information is that organizations and HCPs must be willing to work as a team, develop a plan to meet patient needs will being cost-effective, and be able to make changes quickly in relation to outcomes to be successful.
In addition to the risks already mentioned, there is question whether or not ACOs will have the ability to succeed in certain states, such as California, Colorado, Illinois, Iowa, New York, New Jersey, and Texas. The legality of the corporate practice of medicine, as identified by Shortell, Casalino, and Elliott (2010), “prevents hospitals from employing physicians in the provision of out-patient services. Such laws will constrain the forms that ACOs may take in these states. In addition, scope of practice laws will require examination.” Therefore, when developing ACOs, policy makers will continue to consider state laws and potential ACOs will need to know regulations within the state.
General Impact of Accountable Care Organizations ACOs are intriguing because the potential to “decrease Medicare expenditures while maintaining or improving quality of care” (McMenamin, n.d.).
ACOs are expanding outside of the Medicare setting and private health insurance companies are considering or trialing the use to decrease expenditures. The overall hope is that ACOs will bring HCPs, hospitals, and the interdisciplinary team to work together to improve quality and decrease healthcare expenditures (Fischer & Shortell, 2010). To have an overall positive impact through use of ACOs, organizations will have to “encourage organizational capabilities necessary to meet program requirements” (Fischer & Shortell, 2010). HCPs will have to develop new relationships in the ACO, responsibilities for outcomes will increase, changing based upon mistakes and outcomes will need to be done quickly, and transfer of knowledge through communication will have to be done throughout the ACO (Fischer & Shortell, …show more content…
2010). The financial aspect of ACOs may be enticing to organizations that are willing to meet outcomes and quality indicators. ACOs also will impact savings and revenue in healthcare, and the ACO will be focused on reimbursement. With quality of care increasing under an ACO, there will be a larger shared savings “provided they also lower growth in healthcare expenditures (Centers for Medicare and Medicaid Services, 2015b). “CMS Actuaries project annual Medicare per capita to be $10,143 in 2012. The smallest ACO could share in savings on a base of $50.7 million…the ACO with 60,=[]000 beneficiaries might claim share of savings of a base of $608.6 million…with a max return of $3 million” (McMenamin, n.d.). If outcomes and quality indicators were not met, a loss would be observed in the opposite direction. Health care organizations will have to determine if quality indicators can be met in the current organizational structure or if changes need to be made and implemented to prevent losses. A variety of risks related to ACOs exist, primarily in the financial start up cost and the cost of continuing care under an ACO. It is estimated it costs $1.7 million for the initial start-up of an ACO (McMenamin, n.d.). With the significant start-up costs and ongoing costs, it is a significant risk that a HCP and organization could take. In addition to the risks of becoming an ACO, there are current unknowns about the future overall structure. For instance, the Centers for Medicare and Medicaid (CMS) is proposing limiting “potential returns under ACOs” (McMenamin, n.d.). Also, HCPs that become an ACO provider will have to recognize that there will be a change in Medicare revenues, in which will decrease and share savings increase (McMenamin, n.d.). Predicting the decrease in Medicare revenue and increase in incentives will be necessary for an organization or HCP to continue providing care services. The above discourse is primarily related to Medicare, as this is currently the environment in which ACOs are starting and beginning to pursue outcomes; however, other avenues, such as the private market, are also interested in ACOs (McMenamin, n.d.).
Implications for Nursing Practice Implications of ACOs on nursing practice are varied, as nurses will be required to provide leadership and direction in the change process.
The American Nurses Association (ANA) has called for all healthcare staff to be leaders when developing change related to ACOs as it is important to ensure “patient centered care” (American Nurses Association, 2010). Nurses will play a primary role, as care at the bedside must be taken into consideration in relation to outcomes and process changes. One challenge is that the healthcare hierarchy as traditionally placed physicians over nurses but it has been recognized that “nurses must have equitable leadership as physicians and other services” when changing to an ACO (Tillett, 2012). During the change to an ACO, nurse executives must step up in order to ensure that processes are changed in effort to meet outcomes. One primary importance with the change is that “nurse executives have significant experience in these types of health and quality promotion” changes (Tillett, 2012). Nurses can become leaders for all healthcare staff in driving change and ensuring patient care outcomes and needs are
met.
The goal of encouraging integrated healthcare systems is to “gain efficiencies and improve quality” (The United States House of Representatives, 2010). ACOs are a voluntary program; therefore, HCPs may chose as to whether or not to become an ACO provider. Implementation within the timeline is challenging because restructuring for HCPs and organizations requires intense preparation and risk management.
Barriers to Implementation There are a variety of barriers and concerns regarding ACOs and the care provided to individuals that will fall under the umbrella. One major concern is “that ACOs will focus narrowly on their bottom line and either stint on needed care or use the leverage they achieve local integration to demand unreasonable prices from payers” (Fischer & Shortell, 2010). If this would to occur, large medical organizations working together under the ACO could reflect a monopolistic system in which it would drive up prices and leave small organizations unable to provide services in the community. A second issue is a challenge that lawmakers and policy makers are having in regards to regulation of ACOs. The challenge is to quickly implement an ACO program with accountability for HCPs and healthcare organizations with already established measurement approaches. Not only is the challenge current measurement but the need to advance the measurement structures and systems to ensure ACOs are functioning as intended and improving healthcare spending (Fischer & Shortell, 2010). Third, there are numerous risks identified with the implementation of ACOs. As stated by Singer and Shortell (2011), experts in ACOs, have identified the following 10 risks when implementing ACOs:
1) “Overestimation of ability to manage risk”
2) “Overestimation of ability to use electronic health records”
3) “Overestimation of ability to report performance measures”
4) “Overestimation of ability to implement standardized care management protocols”
5) “Failure to balance the interests of the hospitals, PCPs, and specialists in creating governance and management process to adulate differences”
6) “Failure to sufficiently engage patients in self-care management and self-determinations”
7) “Failure to make contractual relationships with the most cost-effective specialists”
8) “Failure to navigate the new regulatory and level environment”
9) “Failure to integrate beyond the structural level”
10) “Failure to recognize the interdependencies and therefore the potential cumulative ‘Race to the bottom’ of the above mistakes”
The above risks could of course be further discussed in depth; however, the important information is that organizations and HCPs must be willing to work as a team, develop a plan to meet patient needs will being cost-effective, and be able to make changes quickly in relation to outcomes to be successful.
In addition to the risks already mentioned, there is question whether or not ACOs will have the ability to succeed in certain states, such as California, Colorado, Illinois, Iowa, New York, New Jersey, and Texas. The legality of the corporate practice of medicine, as identified by Shortell, Casalino, and Elliott (2010), “prevents hospitals from employing physicians in the provision of out-patient services. Such laws will constrain the forms that ACOs may take in these states. In addition, scope of practice laws will require examination.” Therefore, when developing ACOs, policy makers will continue to consider state laws and potential ACOs will need to know regulations within the state.
General Impact of Accountable Care Organizations ACOs are intriguing because the potential to “decrease Medicare expenditures while maintaining or improving quality of care” (McMenamin, n.d.).
ACOs are expanding outside of the Medicare setting and private health insurance companies are considering or trialing the use to decrease expenditures. The overall hope is that ACOs will bring HCPs, hospitals, and the interdisciplinary team to work together to improve quality and decrease healthcare expenditures (Fischer & Shortell, 2010). To have an overall positive impact through use of ACOs, organizations will have to “encourage organizational capabilities necessary to meet program requirements” (Fischer & Shortell, 2010). HCPs will have to develop new relationships in the ACO, responsibilities for outcomes will increase, changing based upon mistakes and outcomes will need to be done quickly, and transfer of knowledge through communication will have to be done throughout the ACO (Fischer & Shortell, …show more content…
2010). The financial aspect of ACOs may be enticing to organizations that are willing to meet outcomes and quality indicators. ACOs also will impact savings and revenue in healthcare, and the ACO will be focused on reimbursement. With quality of care increasing under an ACO, there will be a larger shared savings “provided they also lower growth in healthcare expenditures (Centers for Medicare and Medicaid Services, 2015b). “CMS Actuaries project annual Medicare per capita to be $10,143 in 2012. The smallest ACO could share in savings on a base of $50.7 million…the ACO with 60,=[]000 beneficiaries might claim share of savings of a base of $608.6 million…with a max return of $3 million” (McMenamin, n.d.). If outcomes and quality indicators were not met, a loss would be observed in the opposite direction. Health care organizations will have to determine if quality indicators can be met in the current organizational structure or if changes need to be made and implemented to prevent losses. A variety of risks related to ACOs exist, primarily in the financial start up cost and the cost of continuing care under an ACO. It is estimated it costs $1.7 million for the initial start-up of an ACO (McMenamin, n.d.). With the significant start-up costs and ongoing costs, it is a significant risk that a HCP and organization could take. In addition to the risks of becoming an ACO, there are current unknowns about the future overall structure. For instance, the Centers for Medicare and Medicaid (CMS) is proposing limiting “potential returns under ACOs” (McMenamin, n.d.). Also, HCPs that become an ACO provider will have to recognize that there will be a change in Medicare revenues, in which will decrease and share savings increase (McMenamin, n.d.). Predicting the decrease in Medicare revenue and increase in incentives will be necessary for an organization or HCP to continue providing care services. The above discourse is primarily related to Medicare, as this is currently the environment in which ACOs are starting and beginning to pursue outcomes; however, other avenues, such as the private market, are also interested in ACOs (McMenamin, n.d.).
Implications for Nursing Practice Implications of ACOs on nursing practice are varied, as nurses will be required to provide leadership and direction in the change process.
The American Nurses Association (ANA) has called for all healthcare staff to be leaders when developing change related to ACOs as it is important to ensure “patient centered care” (American Nurses Association, 2010). Nurses will play a primary role, as care at the bedside must be taken into consideration in relation to outcomes and process changes. One challenge is that the healthcare hierarchy as traditionally placed physicians over nurses but it has been recognized that “nurses must have equitable leadership as physicians and other services” when changing to an ACO (Tillett, 2012). During the change to an ACO, nurse executives must step up in order to ensure that processes are changed in effort to meet outcomes. One primary importance with the change is that “nurse executives have significant experience in these types of health and quality promotion” changes (Tillett, 2012). Nurses can become leaders for all healthcare staff in driving change and ensuring patient care outcomes and needs are
met.