|[December 14, 2012]
Market Share, Physician Employment, Financial Strength Not Essential to Successful ACO Implementation
CHARLOTTE, N.C. --(Business Wire)--
Contrary to previous assumptions, dominant market share, employed
physicians and financial strength are not essential requirements for a
health system to successfully implement an accountable care organization
to a new paper from The Commonwealth Fund and the Premier
These findings are based on an in-depth analysis of 59 health systems of
various sizes, characteristics and regional locations. All organizations
were assessed during in-person site visits upon joining Premier's
Partnership for Care Transformation (PACT™) Readiness Collaborative,
which was launched in June 2010 to help organizations transition to
According to lead author Eugene A. Kroch, PhD, Premier vice president
and chief scientist, "Although much has been written about the potential
merits of ACOs, little information exists to help providers understand
the capabilities needed to create and participate in an effective model
that can constrain healthcare costs while improving quality."
To address the lack of data evaluating the readiness of providers to
implement ACOs, Premier developed a "capabilities framework" tool to
assess health system progress toward meeting the requirements of this
complex delivery and payment model. Premier's framework includes six
Patient-centered foundation (greater patient involvement in clinical
Health home (a primary care medical home);
High-value network (a set of providers that deliver quality care at an
Payor partnership (ACO providers working with payors to create
financial incentives consistent with providing high-value care);
Population health data management (collecting, analyzing and reporting
data covering the ACO's patient population); and
ACO leadership (systematic ACO governance and administration).
Ten of the health systems appearing most frequently among the highest
and lowest scorers were selected for further analysis. Using information
from ACO readiness assessments, the following attributes are among those
that did not appear to differentiate high-scoring from low-scoring
Market share dominance - Despite industry speculation, the data show
that market dominance may not translate into greater confidence for
health systems exploring ACO formation. In some cases, health systems
controlling a relatively small local market share were moving toward
accountable care early to get ahead of market-dominant systems.
Number of employed physicians - Some of the highest performers had the
lowest proportion of employed physicians, contradicting the belief
that physician employment is necessary for ACO formation.
Financial strength - ACO readiness was not correlated with greater
operating margins or financial reserves, with one of the highest
scoring organizations a public hospital with a relatively poor
Health systems that appeared most ready to form ACOs were strongly
patient-centered and had a focus on building the capacity to deliver
advanced primary care.
"There are many assumptions regarding the requirements of successful ACO
implementation, but little data to support them," said Premier President
and CEO Susan DeVore, one of the paper's authors. "This is the first
such analysis, based on data from a large scale of diverse health
systems. What it ultimately shows is there are different paths toward
successful implementation of this model."
Characteristics associated with greater ACO maturity included full or
partial ownership of a health plan, being part of a system or having an
existing collaboration with other health systems, and positive
relationships with physicians and non-acute providers in the market.
Organizations further along in ACO development also had existing
risk-based contracts with payors, including bundled payments or
pay-for-performance arrangements. Few of the health systems at the time
of assessment had developed any sort of partnerships with commercial or
government payors, and most reported poorly developed relationships with
An ACO is a shared savings arrangement under which a set of healthcare
providers - principally physicians and hospitals - assume some financial
risk for the cost and quality of care delivered to a defined population
of patients. If, collectively, an ACO's participating providers are able
to improve quality, enhance patients' care experience and limit per
capita costs, they are rewarded with a share of the savings.
Premier created PACT to identify and address the gaps and inequities in
the quality of care delivered nationwide. Members of the PACT Readiness
Collaborative currently include 46 systems in 58 markets representing
201 hospitals covering 30 states.
2012 paper from The Commonwealth Fund focuses on lessons learned
from Premier's PACT Implementation Collaborative, which consists of 23
heath systems, including 70 hospitals, that are further along in the
process of creating integrated provider networks accountable for cost,
quality, experience and population health. These providers deliver care
across 20 states and cover urban, rural and suburban populations.
About The Commonwealth Fund
The Commonwealth Fund is a private foundation supporting independent
research on health policy reform and a high-performance health system.
About the Premier healthcare alliance, Malcolm Baldrige National
Quality Award recipient
Premier is a performance improvement alliance of more than 2,700 U.S.
hospitals and 90,000 other sites using the power of collaboration and
technology to lead the transformation to coordinated, high-quality,
cost-effective care. Owned by hospitals, health systems and other
providers, Premier operates a leading healthcare purchasing network with
more than $4 billion in annual savings. Premier also maintains the
nation's largest clinical, financial and outcomes database with
information on 1 in 4 patient discharges. A world leader in delivering
measurable improvements in care, Premier works with the Centers for
Medicare & Medicaid Services. Headquartered in Charlotte, N.C., Premier
also has an office in Washington. https://www.premierinc.com.
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