Three Ways ACO Affiliation Can Reduce Costs for Healthcare Providers

Guest post by Madelyn Kearns from Medical Practice Insider

healthcare providerThere is a recognized difference between saviors and savers — one being a rescuer of people, while the other salvages bank accounts. But leave it to accountable care organizations to throw distinctions to the wayside. According to medical systems reviewer Software Advice’s recent ACO survival guide, the ACO model not only operates on delivering high quality care to patients — it also aims to provide the utmost in cost-efficiency to participating providers. It’s not the model for everyone, though, and there are numerous requirements and investments a practice must appease for the arrangement to be beneficial. For one, you have to be able “to deliver on the promise of the ACO model,” Melissa McCormack, medical analyst and blogger for Software Advice, told Medical Practice Insider. That means making sure “improved quality [is] coupled with lower-cost care.” How do providers cut costs while maintaining care eminence? McCormack shared the following steps you can take within an ACO that will allow you to make the cut and reap the rewards:

  1. Focus efforts on chronically ill patients. Those patients represent a disproportionately large portion of a practice’s costs (e.g., they may be 5 percent of your panel but generate 50 percent of the costs), so focusing efforts there will have the biggest payoff.
  2. Leverage health IT. This will only really apply to practices who haven’t already adopted an EHR system. It’s likely these practices will need to adopt an EHR eventually; banding together with a large health system to form an ACO may mean the health system will subsidize the cost of the EHR, as well as help with training and infrastructure to support the system.
  3. Take a patient-centric focus. A big part of the ACO model is minimizing repeat visits and eliminating unnecessary testing — things every patient can appreciate. That tends to boost patient satisfaction, which has meaningful implications for a practice’s bottom line in the form of patient retention.

As the ACO model continues to make gains in popularity — there are over 600 ACOs operating nationwide as of today, compared to the 32 in 2011 — an added air of inevitability is beginning to fall over the industry, and it’s wise to pay attention to, McCormack noted. “Some experts will tell you doctors can either get on board now, or be forced on board later,” she said. Therefore, it’s worth it for practices to at least consider the qualifiers of the value-based care construct if ever such inevitability transforms into mandate. Additionally, for providers fresh to the ACO scene, “joining a learning collaborative like the ACO Learning Network can help you connect with providers who are in your shoes, as well as more seasoned ACO veterans to learn what’s worked well for them—and what mistakes to avoid,” McCormack concluded.


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