Vantage Point

Close your eyes. Imagine you're listening to someone from the Centers for Medicare and Medicaid Services asking US healthcare providers how to create an entity that would:

• Assume responsibility for coordinating a broad continuum of care designed to improve or maintain the health of a large number of patients;
• Be paid a flat rate for each person in its care, as opposed to billing for each procedure or treatment, and;
• Reduce emergency-room visits and return hospitalizations by closely coordinating care and stressing prevention and chronic-disease management.

Would you think you'd traveled back to 1973 when Congress enacted the Health Maintenance Organization (HMO) Act? Think again. It's 2011, the Patient Protection and Affordable Care Act has passed, and this “new” entity—the Accountable Care Organization (ACO)—has the acronym you need to know as the 21st century cure for our ailing healthcare system. ACOs are a provision of healthcare reform. CMS has asked US providers for suggestions about the formation of these organizations, and physician groups are racing to US hospitals to secure the larger share of the reimbursement pie that will be served to the ACOs that deliver quality care at the lowest cost.
The industry is challenged in many ways, including the difficulty of knowing who our customers are and how much influence any particular constituency actually exerts. We might be ahead of the game, though, if we remember how HMOs shaped care at their inception but add the impact of electronic medical records, greater reliance on evidence-based medicine, a growing primary care physician shortage, yet older patients and more expensive medical technology than ever.
Debbie Kossman, PhD, is SVP, National Analysts Worldwide, and 2011 chair of the board of the PMRG