Wednesday, January 26, 2011

ACOs or Clinical Integration?

On numerous occasions you have read here that the high cost and low quality of some health care in the U.S. is due to overuse or misuse of many therapies and the lack of coordination of care among various delivery points, causing duplication of services. If ACOs do what they are supposed to do, they will hold providers truly accountable for a patient’s care through its entirety by creating meaningful clinical collaboration between physicians and hospitals, utilizing clinical evidence-based treatment plans proven to result in higher quality and lower care.

Although there are major challenges to overcome, including connecting hospitals and physicians with electronic data and determining how ACO reimbursement will be distributed, CHRISTUS Health recognizes opportunity and supports the concept of ACOs, but more importantly, the idea of clinical integration, which is the basis of our strategy. This position provides an aligned approach to care management that allows hospitals and physicians to collaborate to provide coordinated, lower cost and higher quality care. The significant differences between ACOs and the Clinical Integration model are:

ACOs are Medicare-only and are still based on a fee-for-service model (which limits their effectiveness in the short term, but they will likely migrate to capitation);
Clinical integration requires an alignment between physicians and hospitals based on the desire to improve the cost/quality equation. That is the primary focus of the alignment.
Clinical integration requires a governance structure that holds all parties accountable for evidence-based protocols that will ensure high quality and minimal "waste" in the care delivery process.
Clinical integration requires data integration across the continuum, but with little specificity about how that occurs. In fact, some of the greatest success stories in clinical integration have been operating with little more than a data repository for years, but have been able to achieve significant improvements in clinical outcomes and cost.

While the challenges outlined by some industry analysts are valid, the concept of ACOs is a sound one if all parties are truly committed to improving the cost/quality equation; however, current legislation does little to actually hold all parties accountable and responsible to each other. Clinical integration, on the other hand, is not legally mandated, but is more of a business management model designed to reduce utilization, standardize care, manage care (via a medical home) and improve quality - while at the same time lowering overall cost. The most important benefit of doing so is that physicians and hospitals can co-negotiate for managed care contracts and can command higher payments from private payers on the front end for demonstrated superior quality.

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