ACO readiness a longer road than expected

An industry report finds that many health systems and hospitals working to establish accountable care organizations have not implemented even one of six core components.

By — Posted Jan. 7, 2013

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Many health care systems and hospitals transitioning to accountable care organizations are finding that it's a more complex process than they initially thought. A necessary step many have missed is establishing relationships with the physicians who will provide the accountable care.

That's according to a report on the readiness of 59 health care organizations moving to ACO settings. The organizations are members of the Premier Partnership for Care Transformation Readiness Collaborative, launched in June 2010 to help organizations switch to ACOs. Researchers said all 59 have much work to complete before becoming fully functional ACOs.

Those with the lowest scores on the evaluation reported difficult relationships between primary care physicians and the health system or hospital. Organizations with the highest scores reported positive relationships with physicians.

“Given that these 59 organizations were predisposed to becoming ACOs by virtue of their joining the collaborative, it was surprising to find at the outset of the collaborative that the level of readiness was modest,” the authors wrote in the report issued in December 2012 by the Commonwealth Fund. The health systems and hospitals were evaluated between August 2010 and June 2011.

The authors said the assessment provides insight into the overall state of ACO readiness and called the results “sobering.” In an ACO, participants receive a share of the savings that result from meeting quality metrics and providing care that leads to healthier patients. Many of the created ACOs are being led by hospitals.

The Commonwealth Fund report was based on a “capabilities framework” designed by Premier that consisted of six core components. Each component has a set of “operating activities” that would be present in an ACO that has achieved full implementation.

No organization fully implemented any of the six core components, and “it was not uncommon to find organizations that had not undertaken any of the activities associated with one or more of the framework's prescribed capabilities,” the report said.

Study co-author Eugene Kroch, PhD, vice president and chief scientist for Premier, said the results should not be taken as an indictment of the organizations, but as a reality check. He said the organizations would agree. “This is hard. Possibly even harder than we thought it was going to be.”

The challenge of determining an organization's readiness — and especially comparing its readiness to others — is that there are many paths to becoming an ACO. Many start their journeys not knowing the path they ultimately will pursue, said Kroch, who agrees with a colleague who describes it as crossing a bridge while building it.

A group practice advantage?

Patrick Carter, MD, medical director for care coordination at Kelsey-Seybold Clinic in Houston, said it's no coincidence that the organizations evaluated by Premier are hospitals and not physician groups.

“The whole idea of an accountable care organization, which is a group of providers — in my mind, physicians — who take care of a population of patients and are responsible for ensuring the quality, the patient satisfaction experience and controlling the cost for that population, is a multispecialty group practice paid by capitation,” Dr. Carter said.

8 million to 14 million commercially insured patients are in non-Medicare ACOs.

Kelsey-Seybold, a 360-physician, multispecialty group with 20 locations, was among the first organizations in the nation to receive ACO accreditation by the National Committee for Quality Assurance. Saying that “many organizations that call themselves ACOs do not have what it takes to accomplish an ACO's vital mission,” the NCQA created a voluntary ACO certification program in 2011. It awarded its first accreditations in December 2012.

Many requirements for NCQA recognition were things Kelsey-Seybold already was doing, such as running population health reports and focusing on preventive medicine, Dr. Carter said.

The Centers for Medicare & Medicaid Services has a shared savings program and a “pioneer ACO” program, each with a different set of criteria. Private-payer ACO plans also are growing in prominence, with an estimated 8 million to 14 million commercially insured patients in non-Medicare ACOs.

Most, if not all, of the trailblazing organizations that received early ACO recognition by either NCQA or Medicare were using a patient-centered medical home/ACO-type model long before the term “accountable care organization” became well-known.

Many large health care organizations that want to become ACOs haven't talked to physicians about what it means to provide accountable care, said Hal Teitelbaum, MD, managing partner and CEO of Crystal Run Healthcare. The multispecialty physician group in New York has more than 250 physicians and was among the first to receive NCQA accreditation.

Dr. Teitelbaum said establishing an ACO is a long process, but each step should involve physicians in three ways:

  • Awareness. Physicians have to be aware of the value of everything they do. Dr. Teitelbaum said every time they order a test or procedure, prescribe a drug or schedule a consultation, physicians need to ask themselves if it's needed and whether it will improve care. It's not about saving money, but reducing waste, he said.
  • Participation. Physicians can do this by working together to share ideas and develop their own best practices instead of being told by others how to provide the best care.
  • Innovation. Organizations need to encourage physicians to think of new ways to reduce waste and increase value. Crystal Run is doing this with an innovation contest in which the best ideas will be implemented and funded by the organization.

The role of IT

There's widespread agreement that the backbone of an ACO is its health information technology infrastructure that allows the easy exchange of data among multiple care settings. The IT component has proven to be one of the most costly parts of achieving ACO readiness because of its complexity.

Even though Dr. Carter believes physician practices are best suited to lead an ACO, he said most small practices can't afford the IT investment. That's why many ACO efforts are being led by hospitals.

Another issue is a lack of standards describing what an ACO's IT infrastructure should look like, said William Jessee, MD, chair of the board of trustees for the Certification Commission for Health Information Technology. CCHIT is the body that certifies paperless records for CMS' meaningful use incentive program. The commission is working on developing a model health IT framework for ACOs. (See correction)

Physicians in ACOs must start viewing themselves as members of a larger community in which to share information. That might be a challenge for doctors in small practices who have been working in their own information silos.

“We've been in this process of looking at what many people consider to be the foundational building blocks of accountable care for some time,” Dr. Teitelbaum said. “In my opinion, the essential element is getting providers, and particularly physicians, to understand and embrace the core elements of accountable care. In our organization, I think that is why we have been successful to date and why we will be successful in the future.”

Back to top

External links

“Measuring Progress Toward Accountable Care,” Commonwealth Fund, December 2012 (link)

Back to top


An earlier version of this story had the title of William Jessee, MD, listed incorrectly. He is the chair of the board of trustees for the Certification Commission for Health Information Technology. American Medical News regrets the error.

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn