Early ACO Adopters Share Their Successes and Challenges

By Debra Wood, RN, contributor

February 22, 2013 - Representatives from the first accountable care organizations (ACOs) to earn National Committee for Quality Assurance (NCQA) accreditation voiced optimism that the new delivery model offers a viable solution for a country aiming to transition to value-based reimbursement, while reducing cost, improving quality and enhancing the patient experience.

Early ACO Adopters
Spencer R. Berthelsen, MD, called ACOs right for patients and the country.

“The country is undergoing transformation from where we have been over the last number of decades of paying for volume to an accountable model of care,” said Spencer R. Berthelsen, MD, chairman and managing director, Kelsey-Seybold Clinic in Houston, one of the first ACOs. “It is uniquely American that we innovate our way out of problems.”

Berthelsen described accountable care as a thoughtful way of managing the dollars spent in order to get more benefit from each dollar. Kelsey-Seybold has saved 30 percent of healthcare dollars that previously had been spent in only minimally beneficial ways.

Early ACO Adopters
F. Douglas Carr, MD, described accountable care as the leverage point for optimizing the quality and cost of care.

Accountable care is the leverage point for optimizing care, both quality and cost, added F. Douglas Carr, MD, medical director of education and system initiatives at Billings Clinic in Montana.

“We are all ACO, all of the time,” said Hal Teitelbaum, MD, JD, MBA, managing partner and CEO, Crystal Run Healthcare in Middletown, N.Y. “Everything we do is part of the ACO process. We have bitten from the fruit of the tree of knowledge. We are so passionate about value and having learned a better way of providing care.”


The National Committee for Quality Assurance released standards in seven categories for its ACO accreditation program in November 2011.

“Being an accountable care organization is a complicated set of responsibilities; you are taking responsibility for a population and for individual patients,” said NCQA President Margaret E. O’Kane. “If we want to maximize the chances of success of the ACO concept, we have to make sure everyone who is a player is capable of being one. The standards provide a blueprint for the ACO.”

Six provider-led organizations, in January 2012, committed to undergo a full survey of their ACO capabilities by the end of the year and achieved the designation.

Early ACO Adopters
Beth Waterman said that the NCQA's accreditation survey for ACOs helped identify gaps in processes.

Beth Waterman, chief improvement officer at HealthPartners in Minneapolis, indicated that the accreditation survey helped it identify gaps in processes, so it could close them.

John Smylie, chief operating officer of Essentia Health in Duluth, Minn., another one of the six, called it a rigorous test and a way to demonstrate the organization’s competency as an ACO to patients, the community and employers.

Berthelsen reported market confusion about what an ACO is and its application for delivery of all patient care, not just in association with the Medicare Shared Savings Program.

“If purchasers are looking for accountable care, they will be drawn to accreditation,” said Berthelsen, adding that it validated the work Kelsey-Seybold had completed.

Teitelbaum said Crystal Run continually pushes commercial payers to “reward us for outcomes, not for transactions,” and has made some headway. It also is working with self-insured employers on shared-savings programs. Crystal Run may even start its own health plan.

Successes and overcoming challenges

Crystal Run has focused on standardizing best practices. It has used data mining to demonstrate to physicians the results of processes it has implemented, with frequent feedback about performance.

Early ACO Adopters
Hal Teitelbaum, MD, JD, MBA, is convinced that ACOs are a better way of providing care.

“The greatest challenges in terms of internal alignment is that providers get mixed messages from the outside world, including from payers and from some providers who have not yet embraced accountable care,” Teitelbaum said. “Much if not all of our compensation is fee-for-service, or volume based.”

Consequently, accountable care improvements may decrease reimbursement. While that proves difficult, Teitelbaum cautioned against trying to operate separate systems based on payers, saying if you are going to be successful in accountable care, you cannot treat one group of patients one way and another group another way based on the payment method.

Early ACO Adopters
John Smylie encouraged ACOs to build on their strengths.

Smylie agreed, saying, you cannot be in two camps. Everything Essentia does is value-based care.

Billings Clinic in Montana reported that commercial insurers in that state continue to reimburse on a fee-for-service basis.

Ensuring all of the care is properly documenting presents another challenge, Waterman said.

“We were doing things well but not documenting them well on an ongoing basis,” added Carr, explaining that is important for improving on a continuous basis. “We had issues related to documentation across practices. We couldn’t keep it uniform from location to location.”

The early adopters considered patient-centered medical homes a fundamental building block toward accountable care, which functions at a population level. They also need robust information technology, Teitelbaum said.

Entities can contract out accountable care capabilities, but Teitelbaum said growing internally allows for more in-depth understanding and opportunity for success.

“Build from the strengths you have,” Smylie advised. “By building the tools and focusing on discrete portions of these populations, you can get a lot of learning. We are on the leading edge.” 

Accountable care organizations are relatively new, but these early adopters sincerely believe in their ability to achieve the triple aim of better care, more patient engagement and less costly care. Teitelbaum concluded that “this is not only a good thing to do for these times, but the right thing to do for our patients and the nation.”  

See related industry research:
2011 Accountable Care Organization Survey - AMN Healthcare


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