Accountable Care: opportunity or unnecessary risk?

Here’s a thought that would eliminate the federal deficit. The government needs to take over running the seminars on forming Accountable Care Organizations. With the number that are already scheduled the revenue would easily wipe out what we owe.


This raises a point. Do we all need to work toward being an ACO? This is not a subversive right wing plot to derail health reform. It’s a simple strategic question. Is accountable care in everyone’s best interests?

I recently had a conversation with a multi-hospital system that was both the dominant provider (sole in most of it) in their market and a low-cost provider. What would they gain from an ACO? Not much. Unless they miscalculated their cost position they really didn’t have much upside and it was unlikely that someone would come and construct new hospitals so there was little downside. My suggestion was to fully understand their current readiness but to wait and see what happens. Not a very profitable recommendation for a consultant but clearly the best for the client.

Let’s be clear. It is in everyone’s best interest to fully understand their readiness for the ACO model (whatever final form it may take) and quantify the investment that will be required to become an ACO. Moving beyond that point will depend on a few key factors: 1) market position- can someone else provide the same services as you in your market? If the answer is “no” then caution may be indicated, 2) are you truly a low cost provider- if this answer is “yes” what savings will you realize to offset the investment that will be required to become an ACO, and 3) do you have the financial resources to get from where you are to where you need to be- if this response is “no” then it might be best to identify a potential partner in the ACO environment and contract.

There is still a lot of uncertainty about what the required elements of an ACO will be. A recently released White Paper (AAFP, AAP, AOA, and ACOP) identifies the desired traits that would make up an accountable care environment. Really aggressive traits that will cost a lot to deliver. What if you start down that path and find that the government decides on a less aggressive model? Time, effort and money spent.

The point of all of this is to underscore the need to plan and to start that process now but also to fully understand the strategic environment before you move beyond that planning. Some organizations are already sponsoring seminars about how they became an ACO in an environment where there really aren’t any. You might want to skip that one and contribute the enrollment fee to reduce the deficit.