The Forum

5 questions to determine your accountable care readiness


Make no mistake about it, operating in anything resembling an accountable care model is incredibly difficult work. It makes providers more responsible for outcomes. It requires we think about non-clinical factors. It forces us to rely on others. The gains are hard won and may not even be visible in the near term.

And yet most will argue that it's the right thing to do.

Given the inherent challenges, it's worth evaluating whether your organisation is ready to make the needed changes to your business model to succeed under accountable care.

These are the five critical questions you need to ask yourself and your organisation before you move forward on accountable care:

1. Are you ready to destroy downstream demand?

While the names may vary, at their core, accountable care systems or organisations assume financial or clinical responsibility for a defined population. This usually occurs through some form of risk-based or capitated contract. You are rewarded for keeping key clinical indicators high and keeping cost and use low.

We think of this as a risk management challenge. On the one hand, you and your partners need to effectively manage clinical conditions (performance risk). On the other, you need to determine ways ways to shift demand to lower and clinically appropriate sites of care (utilisation risk).

In practice, we find that accountable care organisations or systems that are able manage these kinds of risk effectively destroy inappropriate or avoidable demand. The largest measured savings come from reduced hospital and pharmaceutical use. For some health systems who are at capacity, this is a welcome and worthy goal. For others, particularly hospitals with excess capacity, it can have significant financial implications.

2. Are you ready to work with primary care in new and meaningful ways?

A major reason why many are considering accountable care arrangements is that more patients are struggling to manage one or more long term conditions. Acknowledging that one of our major goals under an accountable care model is to reduce inappropriate and avoidable hospital demand, we need primary care to transform into a new and more interconnected web of pre- and post-hospital services.

That transformation will likely include a role for the hospital, ranging from extending clinical decision support from hospital to primary care partners all the way to co-locating or co-investing in new care team members and delivery models. Accountable care cannot succeed unless primary care services are robust and an attractive first point of contact for the majority of your patient population.

3. Are you willing to stick to this for longer than two years?

Hopefully by this point you have a sense that accountable care is going to be a challenging and complicated road to navigate. The adage goes that Rome wasn't built in a day. Yet I've been involved in numerous discussions where the assumption is that savings can be achieved early (i.e., in the first 2 years). To be fair, we have seen this happen. But it's more the exception than the rule. In fact, the world's best accountable care organisations have been at this work for over 10 years, with many only realising significant savings after five years.

The good news is that managing a population is a lot like learning an instrument: the more you practice, the better you get. But leaders thinking about this work should set realistic timelines and be prepared for steps backward before steps forward—particularly in the early days as you start to surface unmet population demand.  

4. Are you ready to think more like an insurer?

Accountable care organisations or systems succeed when they effectively manage the health of a population. That means understanding the needs of individuals who have more than one concurrent condition, plus psycho-social risk factors that make it harder for them to self-manage. It also means turning that understanding into methods and protocols to predict risk of escalation into heavy health care use. You have to think more like an insurance provider—predicting risk.

The good news is that while your inclination might be to think of this problem as one requiring reams of data and millions in information technology, many high performing accountable care organisations started with modest means. What they are able to do—either through information sharing or staffing—is to build approaches with patients that surface both clinical and non-clinical challenges and develop meaningful plans to support the patient across these challenges.

5. Are you prepared to balance delivery and incentive change simultaneously?

The last question you have to ask yourself before moving on accountable care is whether you are willing and able to balance two interconnected but potentially competing changes.

The first change is how we connect and deliver care. This includes the ways address the need to connect the clinical and non-clinical, the ways we shift towards multi-disciplinary teams, and the new roles we develop to cover gaps. In short, everything we'll have to do to reduce demand.

The second is how we reward outcomes instead of paying for inputs. This involves payment change, which often falls outside the remit of any one provider. But hospitals in particular have to ensure that they're not moving too aggressively on demand reduction strategies without being compensated for the lost demand. No hospital can afford to forget about finances. Incentives to destroy demand need to exist or be created.

Our hope is not to scare you away from accountable care but to provide you with an impartial and sober perspective on what it involves so you can have the highest likelihood of success.

151 years and 3 ACOs later, here's where one CEO is taking his system next

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Read our Q&A with Tom Zenty, CEO of University Hospitals in the US, on why Tom has a Charles Darwin quote in his office and how his system is approaching ACO development and the "new age of consumerism."

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