| January 13, 2016

unning head: ACCOUNTABLE CARE ORGANIZATIONS Accountable Care Organizations ShaRon Jones Case Studies in Healthcare Administration | MHC6999 S01 South University Dr. Rose Getting Ready for Accountable Care Organizations Key issues7An Accountable Care Organization (ACO) is a link of hospitals and doctors who shares medical and financial responsibility for offering coordinated care to patients in aim to reduce unnecessary spending.At2each patient’s heart there is always a primary care physician. According to the Obamacare, the ACO is required to manage health care needs for a minimum of 5,000 Medicare beneficiaries and at least for three years. The physicians and thehospitals are legally separate but are clinically integrated where they share patient care data. The two are integrated in a way that they are able establish common treatment and are usually committed towards mutual eminence benchmarks. The general concept behind the ACO is to offer an opportunity for better integration of the health system into a value proposition aimed to improve care, more efficient delivery and high satisfaction (Frandsen, 2014). Today, the law is taking1a carrot –and-stick tactic by advocating the formulation of Accountable care organizations in the Medicare program.Currently, in the United States2about 6 million Medicare beneficiaries are now enrolled in an ACO and are joined with the private sector. Today, more than 744 organizationsall over the United States have become ACOs since the year 2011. A total population of approximately 23.5 Americans citizens8is now being served by an ACO. Although the ACOs are touted in a way to fix an inefficient payment system which reward more, not better caresystem, economist are warning that they may2lead to greater consolidation in the health care industry where some providers are likely to charge more especially if they are the only gamer in the town(Cimasi, 2013). Situational Analysis When thinking about of the ACO, think of an example of a TV manufacturer such as Sony which involves many contracts with a lot of6suppliers to build sets. Just like Sony does for TVs, an ACO actually brings together the different component parts of care to the patient which include specialist, primary care home health, hospitalsand many others3and ensure that all of this parts work well together. However,some1patients are getting each part of their health care separately. Most people just want to by individual circuit boards rather than the whole TV. However, ifthey are shown that the whole television works better, they may be able to buy this hold idea of ACO rather than buying individual services just like assembling patchwork themselves. Trend analysis The lawmakers had searched for long a way1to reduce the national deficit thus making the Medicare a prime target.It was observed that the baby boomers were entering the retirement age which would make the cost of caring for disabled Americans and the elderly is expected to rise. The health laws come up with the Medicare shared saving program. In this program, the ACOs usually make the providers jointly accountable for the wellbeing of their customers, save money by avoiding unnecessary procedures and test and giving them incentives to cooperate. The provider have a chance5to be at risk of losing money if they actually want to aim for a bigger reward or also can enter the program which has no risk at all (Frandsen, 2014). Traditionally, the1fee for service payment system, the hospitals and the doctors are usually paid for each test and procedure. This usually drives the cost up by rewarding the medical providers for doing more even when it is not necessary. TheACOs do not scrap away the fee services, but actually create an incentive to be moreaccurate where it offers bonuses to providers when they keep the costs down. The hospitals and the doctors are expected to meet a certain1specific quality benchmarks focusing on prevention and have to carefully manage patient with chronic diseases. In simply terms, the providers actually benefit more by keeping their patient healthy and out of hospital. If an ACO is unable to save money, it is likely to be struck with heavy cost of investment to improvehealth which includes employing health personnel. Graph showing growth on the ACOs over time Strategy Formulation Hospitals and doctors usually refer their patients to specialist or hospitals1within the ACO network. The patients also feel free to see doctors of their choices outside the networkas still don’t pay more. The1providers who also part of the ACO system are supposed to alert their patients who chose to see another specialist if they feel uncomfortable participating. To ensure patientdata privacy, the patient is allowed to decline having his data shared within the ACO at will. The Accountable care organizations have to follow various strategies for them to be formulated and effective. The healthcare organizations are supposed to align with physician population. This is achieved by evaluation of compliment of physicians as well as determines if they are prepared to become an ACO. Another strategy is to perform a thorough self-assessment of the efficiencies of process of cost. For an organization to qualify the compensations, it is supposed to provide information on it coast and quality (Cimasi, 2013). Another strategy laid by the ACO is promotion of quality rather than volume. The programs align or must align the incentives towards the proficient delivery of care rather simply aiming at the number of a physician can perform. This enable the providers to set goals aimed to reduction of admissions especially of chronic diseases which are not fatal through patient education and preventive care. As part of strategy, the system ensures IT systems capture required data. This data should help the physician help their patient as well as evaluate physicians. They are also very secure or securities have to be established to ensure patient data security. The latest version system enables track admission, infection rates, patient fall and other data which promote patient safety. Negotiating with the insurance is another strategy in order to make up some of those financial losses incurred in keeping or improving the patient health. The providers should make they use their leverage with private insurance companies in order to negotiate reimbursements (Frandsen, 2014). In conclusion, ACOs are becoming persuasive but are likely to be1an interim pace on the approach to a more efficient American health care system. Themain1key challenges for physicians and hospitals are that incentives in ACOs are to reduce emergency room visits,hospitals stays and expensive testing and specialist services which all theproviders1make money is in the fee-for-service system(Cimasi, 2013). References4Frandsen, B. R., Rebitzer, J. B., & National Bureau of Economic Research. (2014). Structuring incentives within organizations: The case of Accountable Care Organizations. Cambridge, Mass: National Bureau of Economic Research9Cimasi, R. J. (2013). Accountable care organizations: Value metrics and capital formation. Boca Raton: CRC Press.3ACCOUNTABLE CARE ORGANIZATIONS 2 ACCOUNTABLE CARE ORGANIZATIONS 3 ACCOUNTABLE CARE ORGANIZATIONS 4 ACCOUNTABLE CARE ORGANIZATIONS 5 ACCOUNTABLE CARE ORGANIZATIONS 6 ACCOUNTABLE CARE ORGANIZATIONS 7

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