The Healthcare ACO … “What it is and why I should care”

Accountable Care Organization

The Accountable Care Organization, or “ACO”, is among healthcare’s latest trends.  And what about the “Medical Home“?  Is that the same as an ACO,  or different?  Some organizations, after their initial support and promotion, appeared to back away from the “Medical Home”, quoting studies which don’t find the expected benefits.  Others cite studies in support of this concept, and then again,  some point out that it’s not that black and white.  In fact, the effectiveness might be related to the style and method of implementation of this and similar concepts.

Let’s take a brief look at these concepts, and why some of us believe the ACO is a “keeper”, until further notice, that is.


An ACO, like the Medical Home, has a Triple Aim

Generally the view is that both the ACO and Medical Home models aim to achieve …

  • better care for individuals
  • better health for populations, and
  • lower costs per capita

Kevin Fickenscher, M.D., the former Chief Strategy and Development Officer for Dell’s healthcare division, describes well, in one of his blogs, the similarity and difference between the ACO and the (related) Medical Home concept:

Accountable care organizations are vertically integrated organizations of care, which are at minimum composed of primary care physicians, a hospital, and specialists . . . Medical Homes are similar . . . in that they consolidate multiple levels of care for patients.  However, medical homes take the approach of having the primary physician lead the care delivery “team.”   Simplistically, an ACO consists of many coordinated practices while a medical home is a single practice”.

To be sure, nothing is perfect, but a concept which is attempting to combine quality of clinical outcome, financial performance, and medical services integration, all in a “fee-for-service” environment deserves to be “tried”.  And it is.  A number of high profile providers have entered this model market.  Some have left.  I am reminded of the “poli-clinic” concept in Europe’s past; an integrated medical system focused on patient outcomes and a “one-stop-shop” medical service organization.  Now we add financial incentives, or penalties, depending on the ACO model used, and for some, we predict, it should work well.


The ACO requires the same business fundamentals as other healthcare organizations

In some ways, not much has changed.  Be it a Medical Home or a large Accountable Care Organization, effective and efficient operations, just like in any healthcare organization, is essential for sustainable financial and clinical performance.

Remember, critical benchmarks still apply as they do for any other healthcare setting.

Kaiser Health News refers to “ACO” as the hottest three-letter word in healthcare.   Take a read and let me know what you think.

When you need proven expertise and performance

Dr. Gunter G. Fuchs

Dr. Gunter G. Fuchs has over 30 years of clinical, administrative, consulting, acute care operations, and strategic planning experience in domestic and international healthcare.