Healthcare Leaders Prep for the ACO Model

Philip Betbeze, for HealthLeaders Media , September 14, 2010
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Fee-for-service is still the dominant payment system for hospitals and health systems, but only for a few more years, until the implementation of most provisions of the Patient Protection and Affordable Care Act, otherwise known as healthcare reform. But that gives hospitals time to prepare for it under the current rules and ironically, by growing market share now under the FFS system, hospitals will be better positioned to succeed under a reimbursement system that disproportionately rewards so-called accountable care organizations, the goal of which is noble, but the structure of which is nebulous.

Regardless of the form that ACOs eventually take, with the hospital, health plans, physicians—or the government—in charge, reconfiguring your hospital organization to take advantage of the new reimbursement will take a measure of imagination and perhaps a double-measure of cash.


The two systems of reimbursement are incompatible. Striving for success under FFS means playing by different rules that won't work under healthcare reform, when hospitals will likely be financially responsible for large portions of a patient's continuum

of care. However, to fund the restructuring that will take place over a number of years, you have to deal with what's in place now, says Gene Diamond, CEO of the Northern Indiana region of Sisters of Saint Francis Health Services, which owns and operates 13 hospital campuses in Indiana and Illinois.

"We're obviously spending a lot of time looking very carefully at the ACO model and trying to figure out what we have to do between now and then to get where we need to be," he says, "and we haven't got the foggiest how much this is going to cost us."

A lot of hospitals are experiencing that same dilemma. But Diamond isn't waiting for someone to tell him how to get there. He says the leadership team has for months been taking trips to more integrated health systems to figure out how they're coordinating care among the different nodes of the patient experience, and trying to figure out what will work for SSFHS.

"We're doing a pretty good job of working on improving outcomes, although we don't have the complete infrastructure yet," he says.

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