Although the accountable care organization concept has been bandied about for years, the Patient Protection and Affordable Care Act put ACOs in the spotlight. Now, health care leaders are trying to determine the best way to transition to this new model of care.

From the perspective of a Medicare/Medicaid patient, there is a major incentive to choose a provider enrolled in an ACO. In principle, an ACO provides higher-quality care at a lower cost.

But for providers, the choice to form or join an ACO is not quite as clear. On the upside, providers could see significant cost reductions, shared savings and quality improvement, evident in both internal operations and the care they deliver to patients. However, so far the evidence shows that there are several issues of which providers must be wary when considering an ACO.

Lacking a Model

The most pervasive problem is that there is no outline to follow when creating an ACO. Thus far, we know that ACOs must serve at least 5,000 patients, consent to be part of the ACO for at least three years, follow either a one-sided or two-sided risk model, and measure and report more than 65 metrics (up from eight).

Outside these few requirements, there is really no official methodology that shows organizations how to opt in to an ACO. Group practices, or even a network of physician practices, could enroll a hospital as a partner to create an ACO, or vice versa — hospital administrators could create an ACO by purchasing one or more physician practices.

Once administrators settle on creating an ACO, the first major hurdle is developing the required infrastructure. Leadership and management structures for both clinical and management personnel are mandated. Processes also must be implemented that show administrators are practicing evidence-based medicine and coordinating care while confirming “patient-centered” care, another term that yet has to be defined.

Merging Pains

Even more challenging could be combining the cultures of the different organizations. Before organizations determine how their ACO will operate, they first need to determine how they are going to formulate the partnership, such as negotiation on how decision-making will be shared across the ACO. One group may have a standard practice of buying whatever each physician wants, while another may buy whatever is cheapest. If these two groups combine within the same ACO, which guideline should take precedence?

Staff- and patient-management strategies differ greatly across the country. Minor details, such as managing staff or making courtesy calls to patients, will have to be unified for the ACO to function as one seamless entity. How people work together can be a bigger factor in determining the ultimate success of an effort than what they do.

Technical Considerations

In addition to cultural changes, ACOs force a synchronization of technology. It won't be possible for different organizations to work together under the ACO system if they are operating two completely different technology systems. These are issues administrators will have to address when forming an ACO, many of which will affect the efficiency of the organization.

ACOs can streamline many functions on both process and organizational levels. Physician groups tend to have speedier billing practices, while hospitals often take weeks to make payments. With an ACO, an improved billing process will be necessary to ensure that physician practices aren't losing cash flow.

Furthermore, administrators will need to become masters of business intelligence and must learn how to measure their success, or lack thereof, to improve their organizations, not just for compliance. Given that uncertainties are guaranteed in such an undertaking, administrators must practice certain survival skills, such as how to collaborate at all levels. Agility will be imperative for administrators as rules continue to change.

The Benefits

With ACOs, there is potential for significant gains in cost and quality, as well as the ability to maintain or grow a practice's Medicare/Medicaid patient base — despite the need for an enormous amount of work up front. ACOs were developed to help the patient and to ensure that  hospitals and physician practices continue to provide quality care, even as such risks as an aging population strain America's health care system. In addition to a continued dedication to quality care, patients will see lower costs. In theory, ACOs will ensure that patients are receiving the care they need, rather than care that helps the organization make money.

Providers also may experience success in the new era of ACOs. Enrolling in an ACO will help them successfully manage the influx of patients and transformation of patient care without having to worry about increasing costs. While it hasn't been defined yet, there may be an opportunity for providers to garner incentives when meeting the guidelines of ACOs. This mutual relationship will only improve the care patients receive.

Wherever an organization stands on ACOs, it must accept that it will become part of the future of health care in this country, and must begin building or strengthening the skills and capabilities that will be necessary to win on that new playing field.

 Ron Wince is the CEO of Guidon Performance Solutions in Mesa, Ariz.