For Lerla Joseph, MD, participating in an accountable care organization (ACO) was a way to stay independent and handle
increasing government regulations.
Further reading: Physicians must harness their power to ensure independence
The Richmond, Virginia-based internist started organizational efforts to form an ACO in 2012. By December 2015, the ACO had government approval for Central Virginia Coalition of Healthcare Providers, representing 38 physicians and six midlevels, all from small, independent practices.
“As a small practice, we’ve been challenged by many things in terms of electronic health records (EHRs), regulations and managing quality metrics,” says Joseph. Although doctors in her area were increasingly deciding to become employees of hospitals or large groups, she had no interest in leaving private practice, because she felt she could better serve her community by remaining independent.
Last year was the physician-led group’s first for reporting quality data to the
Centers for Medicare & Medicaid Services (CMS) and Joseph is optimistic about the pending results and how the organization can improve healthcare for the patients and their providers.
“Having now worked in the ACO environment, I can tell you there is a lot of creativity and a lot of ingenuity going on,” says Joseph. “I think this will benefit not only our clinicians, but our patients and healthcare in general.”
ACOs have become a popular option for physicians who, like Joseph, want to remain independent but need help with the increasing administrative burden stemming primarily from the Medicare Access and CHIP Reauthorization Act (MACRA) and its requisite quality data reporting.
There are three types of ACOs: physician-led, hospital led and hybrids, which include both physicians and hospitals. Experts say physician-led ACOs continue to show promising results, provide a means for doctors to maintain control and are viable for small groups. The strength-in-numbers approach helps physicians not only navigate government regulations, but enables them to pool resources to pay for technology to increase efficiency while providing quality care.
Here’s what physicians need to know about ACOs.
Performance of physician-led ACOs
Joseph and her ACO colleagues have reason to be optimistic about their long-term performance on quality measures, because in general, research shows that physician-led ACOs outperform those led by hospitals.
A study published in the New England Journal of Medicine, as well as one from consulting firm KPMG, found that ACOs led by independent primary care groups typically saw greater savings compared with hospital-led ACOs.
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Physician-led ACOs have several advantages over those led by hospitals, says Sue Feldman, RN, Ph.D., an associate professor at the University of Alabama at Birmingham who conducts research on ACOs. “Physician-led groups can shop around for services, including shopping for diagnostics, specialists or post-acute care that a hospital cannot do,” says Feldman. “If a hospital gets revenue from performing a diagnostic test, it’s hard for that hospital to negotiate with itself. Physician-led ACOs are not bound to one center and can look for a better price.”
One of the biggest areas of savings for an ACO lies in reducing emergency department and hospital admissions, which are both revenue-generators for hospitals. “It’s tough for a hospital to tell its physicians to use its emergency department and hospital less,” says Matthew Bates, MPH, senior leader with Studer Group, a healthcare consulting firm.
Physician-led ACOs tend to be smaller and have fewer layers of bureaucracy than hospital-led groups, allowing them to quickly identify and respond to problems. For example, MD Value Care, a physician-led ACO in Glen Allen, Virginia, after determining that it needed better transitional care, created a program wherein care coordinators call recently-discharged patients to schedule follow-up appointments and review medications.