Hospitals: Are You Ready for an ACO?

ACOs Change Delivery of Care by Improving Quality

The Accountable Care Organization (ACO) aims to change the way hospitals deliver care by changing the financial incentives.  There are different payment structures than can be used to encourage hospitals to lower costs, improve quality, or both.  Since the goal of an ACO should be to lower costs and improve quality, using an accountability payment structure – one in which costs and quality are linked–will be the most effective.

For most hospitals and health systems, appropriately synchronizing changes in payment incentives, aligning of physicians, and the clinical model will prove a tall task.  The pacing and sequencing of investment and change must be very carefully managed to ensure the financial sustainability of innovation.  Accepting more payment change without sufficient clinical innovation leads to underperformance against new clinical and financial measures of success.  The opposite is equally true: changing a care model without a revenue model to capture the value created promises to improve someone’s bottom line, but not the hospital’s.

What is a hospital or health system to do? Continue Reading here to full article…