California: The Learning Lab Ecosystem for Accountable Care Organizations (ACOs)

Want some pointers on how to assemble your Accountable Care Organizations (ACOs)? Look no further than lessons from the "ACO ecosystem," otherwise known as The State of California. At least that's the message of this Integrated Healthcare Association "white paper," authored by James Robinson and Emma Dolan. For ACO wannabes, the Disease Management Care Blog says this is "must" reading.

It turns out that The Golden State has hundreds of Independent Practice Associations (IPAs) and Integrated Medical Groups (IMGs), many of which already appear to meet or exceed the emerging definition of ACOs. Their experience to date can be very instructive.

Some of the more important points gleaned from the report by the Disease Management Care Blog:

How much integration is really necessary? If California is any guide, financial success and market dominance doesn't appear to correlate with the degree of integration. Instead, clinical quality and profitability are a function of culture, HIT infrastructure, administrative leadership and the alignment of the physicians with the organization's goals. To be successful, nascent ACOs don't need to be highly integrated.

Put physicians on salary and you own them, right? Not exactly. Docs need to feel accountable, have ownership, get performance feedback and agree with the ACO's goals. They also need advanced care coordination capabilities and access to coordinated chronic care teams and care management. The DMCB wonders if ACOs will need to have physicians in prominent leadership positions.

What about the patients? To succeed, ACO's will need to reconcile the twin expectations of coordinated care and unfettered patient choice. If California is any lesson, IPAs and IMGs are better at coordinating care than accommodating patient choice. They've done well in contracting with health maintenance organizations (HMOs) that lock patients into a network. They've done less well in attracting patients who are in preferred provider organizations (PPOs) and have a choice. Could this be a potential Achilles heel for Federally sponsored ACOs?

Bigger is better? Not necessarily. Large IMGs and IPA become unwieldy. What's more, smaller organizations have shown that they can outsource management are care coordination functions successfully. This is another confirmation of what the DMCB has been saying all along: ACOs and disease management vendors could be the beginning of a long friendship.

This important white paper has some other interesting pointers on how ACOs should approach the mix of capitation, fee-for-service and bonuses. That'll be addressed in a future posting.