The number of Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program (MSSP) has continued to grow steadily as there are now approximately 405 participants after the latest wave of 89 newly accepted applicants.[i] Participating as a MSSP ACO gives healthcare organizations a low-risk means to start transforming to value-based care while they change processes and acquire new health IT infrastructure. Although the program is still fairly new, having only been around since 2012, about 25 percent of ACOs have started to separate themselves from the pack by being able to generate shared savings.[ii]

Being able to generate shared savings is crucial for ACOs because the underlying premise of value-based care is that coordinated, preventive and evidence-based care will both improve the health and lower the per capita cost of a defined population. Furthermore, the sharing in cost savings helps offset reductions in fee-for service revenue, pay for new health IT infrastructure, and builds organizational momentum for the expansion of risk-based contracting. However, generating shared savings has been an elusive goal for the majority of MSSP ACOs to date.

Dr. Randall Williams, MD wrote an interesting article on this topic recently on Pharos Innovations discussing why most ACOs have fallen short of generating cost savings. His hypothesis is that “…most ACOs are still working on basic organizational issues like:

• Integrating their doctors
• Getting CMS claims data into a format that can be analyzed
• Documenting and reporting quality performance metrics

While that work is necessary, it is not at all sufficient. It won’t generate the cost savings required to get to the shared savings bonus opportunity.” [1]

Dr. Williams believes that the ACOs that have been successful in generating shared savings have focused heavily on reducing avoidable admissions and readmissions. He makes an excellent point that ACOs need to transition from a tactical focus on operationalizing their ACOs to a strategic one that will drive greater results.

Transforming to value-based care is a complex process because it impacts the entire organization. For ACOs to achieve greater results they have to move away from siloed efforts and approach value-based care as a series of interconnected activities. It is not just solely about data, not solely about analytics and not solely about clinician workflows. It’s about all of those activities operating in an integrated manner and augmenting each other. This is known as an enterprise population health approach that integrates data, analytics, and workflows across the entire organization to support new care models. An enterprise approach leads to synergies and efficiencies across the organization that are the difference makers when trying to drive results as quickly as possible for a targeted population.

2015 is a critical year for ACOs to hone in on the strategies and health IT infrastructure that will help them move into the leaders group of ACOs generating shared savings. We have just published a new whitepaper entitled “ACO Best Practices for Shared Savings” that explores this topic more by profiling the strategies used by a few successful ACOs and recommending what ACOs could be doing differently this year.

Download the whitepaper here.