Publisher’s Letter August 2010

An End to What We Know

Accountable Care Organizations (ACOs) are rapidly organizing in all corners of the nation. ACOs need to be up and running by Jan. 1, 2012, when CMS, as directed by the Patient Protection and Affordable Care Act, will begin assigning Medicare beneficiaries to certain ACOs in each geographic area. As these ACOs provide efficient and effective care to their patient population, the savings will be shared amongst the components of the ACO.

On Jan. 1, 2012, the way hospitals, physicians and networked facilities are compensated by Medicare for services will change forever. This is an absolute material change from reimbursement as we know it as these new networks will have to share payments derived as a result of proven quality care to the population they are responsible for. I heard one hospital executive refer to Jan. 1, 2012 as the beginning of the weaning process of U.S. facilities from fee-for-service reimbursement from Medicare.

There are many challenges in forming an ACO. No two geographies or patient populations are alike. Imagine the variance in cost, morbidities and provider make-up between locations such as Billings, Mont., and Atlanta, Ga.

A major obstacle in the forming of an ACO is getting the hospitals, primary care physicians and necessary alternate site facilities to collaborate and agree on roles and responsibilities within the ACO. Imagine the leadership needed to bring together not for profit hospitals, private practices and corporations to commit to delivering high quality care to a geographically defined patient population. And what about the physicians, facilities and organizations on the outside looking in that did not participate in the ACO?

The time for connectivity is no longer a mandate – it is an imperative. For multiple care giving constituents to provide high quality care, they must be wired together with EHRs and β€œin the cloud.” This is no small undertaking, but it is an absolute hub of the wheel.

The emergence of ACOs is immanent. I am tracking this very closely and I encourage you to join me at I would welcome your comments and questions.

Thanks for reading this issue of The Journal of Healthcare Contracting.

About the Author

John Pritchard
John Pritchard is the publisher of The Journal of Healthcare Contracting.
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