ACO Ver.2.0

Accountable care organization (ACO) enthusiasts may want to check out this article, "'New' Health Organizations Will Truly Manage Care" appearing in the latest issue of Managed Care Magazine. Based on a large provider survey and his own personal insights, author Richard Stefanacci points out that the current generation of Accountable Care Organizations(ACOs) is destined to fall short.

This is how the Disease Management Care Blog pieces together Dr. Stafanacci's narrative:

Hospitals and physicians will continue to pursue merged arrangements characterized by a) shared risk, b) less physician autonomy and c) greater efficiency. Yet, it's still too easy for these first generation ACOs to underestimate the downsides of risk contracting and it's even easier for them to under-invest in care management programs. Add to this the a) "dismal" track record of past physician-hospital collaborations, b) disappointing Physician Group Practice Demo results and c) disconnect between inferred savings and hard dollars, and there is every reason to be skeptical about the ACOs' future.

Even worse, there's a government-generated health care bubble. The looming budget crisis will force Washington DC to retrench.  Many large provider organizations and ACOs, caring for tens of thousands of patients with thousands of full-time employees, will be deemed "too big to fail."  That "popping" noise will announced the start of a very destabilized market.

Coming in the wake of all this underfunded wreckage will be second generation provider-led accountable organizations. They'll use the 2012-2014 time period to build a patient-centered culture, learn about insurance risk, invest in care management and prepare for the lean times ahead. They will focus on a) the 20% of patients who are responsible for 80% of the costs, and b) understand bundled payment arrangements.  That's when having strong physician leadership, fully aligned care management-medical homes and enterprise-wide medical decision support will mean the difference between merely surviving and thriving.