Accountable Care and Independent Practice: Can they Coexist?

It’s happening right before our eyes. The health care system is transitioning away from volume-based care and reimbursement in favor of payment models that emphasize outcomes and cost. Accountable Care Organizations (ACOs) are a good example of a construct that supports the emerging fee-for-value methodology. With no formal definition, there are many different types of organizations that could be considered an ACO, but the category may be best defined as a group that promotes coordination between payers, providers and patients to improve outcomes within the patient population.

Is there room for the independent medical practice in the ACO model? Hello Health explored this question in March 2013 in our independent medical practice videocast series.

One year later, we’re revisiting the issue with a subject matter expert from Software Advice.

For primary care practices to participate in the ACO model, is a hospital buyout inevitable?

Definitely not inevitable. However, hospitals stand to reap the greatest cost savings when the ACO model is executed well, and primary care practices are the “lynchpin” of the model, so it’s likely hospitals will come calling with offers of employment for primary care practices. That said, there is a place for the autonomous primary care practice in the ACO model; private practices do have the option of remaining independent. They can create ACOs with other individual practices and/or with larger health systems. Even if a practice doesn’t sell to a hospital, joining together with a larger hospital to form an ACO might be advantageous because these organizations typically have greater resources that smaller practices can benefit from.

When transitioning to an ACO model, what are the major upfront investments?

This transition can be quite costly for private practices, especially those that haven’t already adopted an EHR system. One of the biggest areas of investment upfront is health IT. Practices will need to implement an EHR if they haven’t already, as well as a platform to allow for the exchange of information with other EHR systems. And because of the patient-centric nature of the model, practices will need tools to support patient engagement and patient/care team communication.

How can smaller, private practices achieve a positive ROI in the ACO model?

First, it’s important to remember that the “ROI” belongs to the entire ACO, not just an individual physician’s practice. It’s very much a teamwork scenario where the group wins or loses together. We offer several recommendations for smaller practices to help maximize the return.

First, a focus on high-cost, chronic illnesses is key—this is where the biggest potential for cost savings will typically lie. Because chronically ill patients comprise a disproportionately high percentage of costs, they present a significant opportunity for cost savings when given extra attention.

Another important tip for physicians is to learn to work in care teams and delegate some of the traditional physician responsibilities to NPs and PAs. This takes full advantage of the clinical abilities of the NPs and PAs while simultaneously allowing the physician to zero in on those high-cost, chronically ill patients.

Private practitioners must also focus on making changes at a reasonable pace, resisting the temptation to take on everything at once. Overloading in the transition can be overwhelming and frustrating for a practice, and it can also pave the way for failure right out of the gate. Prioritizing the most important goals to tackle this year versus next year will help to ensure a smooth transition.

Melissa McCormack contributed to this post. She is an analyst at Software Advice, a company that researches and reviews EHR technology. She is also a managing editor at Software Advice’s blog.

About the Author
Nat Findlay

Nat Findlay is the Founder and CEO of Hello Health, the EHR that offers tools to promote profitability for today’s independent medical practice.