Wednesday, July 30, 2014

What are ACOs?

ACO stands for Accountable Care Organization.  These groups are growing in number driven by healthcare reform. ACOs are groups of hospitals, doctors, or other healthcare providers who come together to coordinate care for Medicare patients.  The mission of ACOs are to ensure that Medicare patients get the right care at the right time while avoiding duplication of services and preventing medial errors. Their goal is to help control costs and improve the quality of care. 

What does this mean to the supply chain?  Vendors and supply chain professionals will be important partners. With many of the ACOs, physicians are now the main decision-makers and value-purchasing is becoming important. Key items that will impact the supply chain are information management, vendor alignment, and physician and clinical integration.  Determine how your business can assist in those efforts.  Being a resource for these new organizations will solidify your involvement and hopefully grow your business.

Earlier this year CMS released an ACOs performance report for the Medicare Shared Savings Program (MSSP).  The results were mixed. There were 29 of the 114 Medicare ACOs who saved $128 million for the Medicare trust fund and additional 25 spent less than their benchmarks.  However 60 organizations scored below budget and 85 organizations failed to produce savings.*  Most experts agree these are not bad results for the first year of many of these programs. The ACOs that are lagging behind are learning from the successful organizations to improve results as they go forward.

Time will tell how ACOs change the provider landscape and how customers are impacted. Keeping up with the constant shifts in healthcare is important and evaluating how your organization fits into the picture if vital to long term success.

*Source: Stats were provided from ACO Insights Magazine.