In many ways, the hospital industry suffers from a hangover of the 1990s, when hospitals aligned with physicians in physician-hospital organizations and management services organizations.
These structures aimed to coordinate care through disease management programs and capitated risk contracts, but they were generally regarded as unsuccessful in improving quality or lowering costs. Hospitals overpaid physicians for practices, networks acquired hospitals without achieving economies of scale and care coordination was generally not achieved, with a few exceptions.
These failures are still palpable to many healthcare leaders, many of whom may point to accountable care organizations and say, "déjà vu." A new study published in Health Affairs compares ACOs with integration efforts in the 1990s, finding ACOs will fare best if they are not oversold as silver bullets and if they are structured to target specific populations.
Specifically, the study highlights some features ACOs have that 1990s' integrated delivery networks lacked, whether that be beneficial or detrimental. One of the most significant differences is the role of health information technology, data analytics and clinical decision support. HIT alone will not cure an ACO, however. "Overall, the evidence suggests that information technology is necessary but insufficient to improve outcomes," according to the study.
Another difference is the lack of consensus of what should be at the ACO's core — a hospital system, physician group or some new type of organization. A recent, separate study found 24.4 percent of ACOs were physician-led, whereas 4.9 percent were hospital-led, 20 percent were health plan-led and physician-hospital organizations led 15 percent. Those figures reflect little dominance among any one type of provider in ACO development. ACOs' specific cost-cutting strategies are open to innovation, as well. In the 1990s, there was more consensus that capitated contracting between payors and integrated delivery networks would best reduce costs.
"Perhaps the biggest difference, however, is the impetus from the demand rather than the supply side," according to the study. "Private-sector providers and payors have developed commercial pilot accountable care organizations based on existing managed care models…in markets where such models already predominate, such as California, and increasingly in markets where they don't, such as Illinois, Massachusetts and northern Virginia."
This private-sector focus supplements the government's authority for CMS ACOs. "CMS is patron and protector of the current restructuring effort, seeking to bring costs down to help alleviate the federal deficit. This gives the accountable care organization movement a greater sense of urgency and political approbation," according to the study.
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These structures aimed to coordinate care through disease management programs and capitated risk contracts, but they were generally regarded as unsuccessful in improving quality or lowering costs. Hospitals overpaid physicians for practices, networks acquired hospitals without achieving economies of scale and care coordination was generally not achieved, with a few exceptions.
These failures are still palpable to many healthcare leaders, many of whom may point to accountable care organizations and say, "déjà vu." A new study published in Health Affairs compares ACOs with integration efforts in the 1990s, finding ACOs will fare best if they are not oversold as silver bullets and if they are structured to target specific populations.
Specifically, the study highlights some features ACOs have that 1990s' integrated delivery networks lacked, whether that be beneficial or detrimental. One of the most significant differences is the role of health information technology, data analytics and clinical decision support. HIT alone will not cure an ACO, however. "Overall, the evidence suggests that information technology is necessary but insufficient to improve outcomes," according to the study.
Another difference is the lack of consensus of what should be at the ACO's core — a hospital system, physician group or some new type of organization. A recent, separate study found 24.4 percent of ACOs were physician-led, whereas 4.9 percent were hospital-led, 20 percent were health plan-led and physician-hospital organizations led 15 percent. Those figures reflect little dominance among any one type of provider in ACO development. ACOs' specific cost-cutting strategies are open to innovation, as well. In the 1990s, there was more consensus that capitated contracting between payors and integrated delivery networks would best reduce costs.
"Perhaps the biggest difference, however, is the impetus from the demand rather than the supply side," according to the study. "Private-sector providers and payors have developed commercial pilot accountable care organizations based on existing managed care models…in markets where such models already predominate, such as California, and increasingly in markets where they don't, such as Illinois, Massachusetts and northern Virginia."
This private-sector focus supplements the government's authority for CMS ACOs. "CMS is patron and protector of the current restructuring effort, seeking to bring costs down to help alleviate the federal deficit. This gives the accountable care organization movement a greater sense of urgency and political approbation," according to the study.
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