Accountable Care Organizations



ACO is probably the second biggest buzz in the US healthcare industry behind Meaningful Use.  Here's another attempt for hospitals to address reimbursement and payment on an outcomes and quality based model.


For a great infographic on the different ACO models, check this out.


The idea, in principle, is a simple one.  Healthcare providers in a multitude of settings, partner with a payer (most often Medicare to begin with) to share the savings of effective patient care or the burden of ineffective care. The largest question to date in the healthcare debate is if we're cutting healthcare costs, who's profits are going to be lost.  In principle, the ACO addresses this by sharing margin with all parties so that better care could actually result in equal or better profits in the short term. 


Here's a simple example.


Jon has severe Asthma that is poorly managed.  In addition he has several co-morbidities (smoking and obesity) that are not actively treated.  Each hospital visit to respiratory care costs his insurance $5,000. The actual cost for his treatment is $4,400 resulting in a profit to the hospital of $600.  With decreased reimbursements from readmissions and rising supply and drug costs, the hospitals profit margin continues to dwindle. 


Jon's insurance and hospital decide to create an ACO and identify Jon as an eligible chronic care patient for inclusion.  In addition to the hospital, they also include the clinic practices that Jon goes to and several outpatient treatment facilities.  The insurance now dictates via a capitation model that they will pay $9,000 for patients like Jon each year.  As soon as Jon has been admitted to the hospital twice, the ACO begins losing money on Jon.  This incentivizes the organization to avoid admissions for Jon. They invest in providing him resources for smoking cessation, more actively monitor his Asthma and have him join group physical therapy to address his obesity. In addition, a Nurse Practitioner from his clinic regularly checks in on him and his progress. The cost for the programs Jon is involved in are $6,000 to the hospital and the affiliated clinics.  That means  the shared entities of the ACO share a savings of $3,000 in the first year of the program - a much greater profit than they would have had had they just admitted Jon through the ED every time it was necessary.


In principle this model looks excellent, but in practice, it is exceedingly difficult. Questions of how to share the savings arise. As the program progresses, most ACOs utilizing a capitation model have decreasing payment per patient. Even Medicare's Shared Savings Program has built in diminishing returns over time. What happens to the really bad patients that refuse proper counsel and continue to live in bad health at the cost of the ACO? Most ACO's encompass very separate entities, how do you share care of a patient in a meaningful way when separate systems are being used? Then the ultimate question is how to get the right information to the people on the front lines that actually make a difference. The challenges seem daunting and have caused many organizations to be in a perpetual state of tire kicking.


Enter agile analytics within QlikView. 


I see QlikView being able to help in (3) specific ways.


  1. Development
    • As part of the Medicare Shared Savings Program, Medicare sends an ACO a minimum group of 5,000 Fee-For-Services beneficiaries. The format they send these in is a CSV file called GPRO (Group Practice Reporting Option). The ACO is responsible for not only matching up the patients within their GPRO to the patients in their health system but then also collecting and submitting data back to CMS in a structured GPRO format. In talking with several of our ACO customers, the difficulty has been both the syncing of patients from GPRO to data within the EMR and then the export of this back to CMS.  I've discussed with several customers the opportunity to use QlikView to merge their EMR data with the GPRO CSV, generate the metrics in QlikView instead of as stored procedures or complex SQL queries, then format a simple straight table that can be re-exported back out as a CSV for submission to CMS.  Simplicity is the key!
  2. Deployment
    • Most (if not all) ACOs are comprised of multiple groups of tied loosely by a payer or Medicare and maybe an affiliation entity.  The problem lies in deployment of one source of truth to multiple provides across the continuum of a patient's care.  You can apply processes and address patient needs for a patient while they are admitted to avoid readmission, but what happens when they leave and go to the clinic that doesn't have the complex system the hospital has? How do they get at information that can be used to better serve a patient when they transfer services?  In talking with several customers, a logical step is to sit QlikView in the middle. Now a patient's personal analytics can be referenced by multiple providers across their spectrum of care.
  3. Modification
    • Let's get to what makes QlikView special - the associative business discovery model that allows innovation on a host of fronts.  QlikView is going to allow you to visually see things that you didn't think to ask. Which of the 33 Medicare ACO metrics are most effective in improving quality? Which preventive Health measure resulted in the greatest cost savings? After two years, which employed measures from PCP and NP's in the clinics had the greatest effect on At Risk Diabetes patients?  How about the IVD patients?  How about the comparison of both? 


QlikView provides the opportunity to see what no other tools will allow you to see - the grey.  The neglected patients or measures. The deficient clinics or providers.


My healthcare hero is Atul Gawande, a frequent contributor to the New Yorker and strong proponent of healthcare reform through simple measures. Last Fall, Dr. Gawande wrote an Op Ed piece for the New Yorker about the concept of 'Big Medicine'.  In it he evaluated the large restaurant chain Cheesecake Factory and the fact that somehow it operates with an encyclopedic menu of food and beverage options while maintaining ridiculously high quality standards and an impressive profit margin.


  1. Gawande asked the very simple question 'how can this be translated to healthcare'?


The first step is to employ rigorous process of investigating what works and what doesn't and being flexible and nimble enough to adjust things that aren't working.


Perhaps ACO's are not the solution for the woes of our healthcare cost crisis, but the concepts are driving innovation in processes and setting up a foundation for us to see the triggers and effects of different efforts on quality of care.


Join us next Thursday afternoon as Brian Veara from ThedaCare discusses QlikView's use in his organization for more actively addressing their ACO metric requirements and the process Thedacare employs to streamline their GPRO submission process.  You can sign-up for the Webinar here!

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