Options for Practices Regarding Accountable Care Organizations

These days physicians, medical practices and health systems around the country are debating requirements of becoming an Accountable Care Organization (ACO), and are often wondering where their organizations can accomplish the task. Health care consultants and other experts point out that this is a critical time to develop strategic plans, implement some operational initiatives and update a business' direction.  So while the issue is important to discuss and consider for many groups, it's also critical to take look at all the options in this time of ongoing health care reform.


We're all aware that to survive every doctor must deliver cost-effective care to patients.  Consequently even large systems have been scrambling to update their electronic medical records beginning to try and implement a stronger clinical integration.  However, it's important to have a clear framework for practice changes and and both a mid-range and a long-term plan.


Recent articles on health care trends and the transformation of the health care industry suggests other options to ACOs will emerge as well  They include the following: low-cost leader, niche clinical service provider, research/innovation institute, island, virtual health organization, and vantage integrated provider.  Understanding these opportunities and niches, can help practices to put down a  plan to outline goals, make action plans, and decide the resources necessary to achieve them.


Below are descriptions of these other potential roles:


1. Low-Cost Provider

• Very selective scope of services
• Based on low cost and patient convenience
• Care is provided in low cost settings
• Minimal administration
• High patient volume with reduced cost per patient
• Will build volume via contracts and "word of mouth"
• Little to no investment in aggressive marketing
• Operational standardization and efficiency are maximized
•  Mid-level providers used to reduce the number of MDs and RNs providing care

2. Niched Provider

• Narrow array of services
• Standardized, efficient operations
• Practice identity based on clinical expertise and ongoing innovation
• Structured means of developing and managing patient referrals
• Targets patient base due to  market size, usage patterns, value sought and decision criteria used to select care
• Thorough understanding of competitors
•  Proactive in establishing and managing new strategic relationships 
• Able to recruit and retain a clinical team with area respect

3. Research/Innovation Institute

• Focused on bench and translational research
• Can implement services and products more quickly and cost-effectively than competitors  
• Targets patients specific to the services and products being developed
• Can anticipate multiple trend to identify new services and products
• Open innovation network attractive to physicians, scientists, and others
• Strong relationships with public and private funding sources
• Minimal bureaucracy

4. Island

• A sole provider in an area.
• May be any size.
• Able to protect practice from competitors
• Strong relationship with local community
• Strong outreach strategies and resources
• Services meet the majority of the needs patients and is supplemented with patient transfer agreements, tele-medicine, and coverage agreements for needed specialists
• Ability to limit out-migration by patients via meeting their needs (access, clinical skills, service)
• Financially stable
•  Creative in recruitment and retention of clinical staff

5. Virtual Health Organization

• Contracts to support other providers.
• Does not own or operate a care delivery site.
• Delivers health care resources
• Strong marketing and sales capability 
• Large, geographically dispersed network of resources available 
• Strong network management  
• Strong IT and telecommunications resources compatible with a diverse array of providers

6. Vantage Integrated Strategy

• ACO "plus"
• Provider, payer, or other party that assembles and coordinates a network or system that consists of providers, finance and other strategic alliances.
• Strong IT and telecommunications resources compatible with a diverse array of providers
•  Access to capital
•  Legal skills to form network relationships and manage within the regulatory guidelines
• Understanding of the businesses and the management strength necessary to integrate the operations and cultures of diverse members of the network

It may seem that a "wait and see" attitude may be best until all of these aspects are determined, but doing so is risky as other more proactive providers will carve out their position and limit another practice's options. However, it's also risky to just select a path because it seems to be your only option, or because it's what everyone else in your market is doing!


Take some time, read more than one opinion and continue to map out re strategies for practice growth and success.


Note:  The thoughts and opinions on Training Wheels are my own, unless otherwise referenced, and are to be food for thought.  If contemplating business changes, these blog posts are not a substitute for consulting your lawyer or accountant. I"ll bet you already figured that out, didn't you?