Accountable Care Organizations (ACO’s) and Telehealth

accountable_care_infographic_2012_HITCWhy are Accountable Care Organizations (ACO’s) and telehealth such a great match? First, here is why you should care about ACO’s:

  • Many health care organizations are looking to form ACO’s throughout the US as a result of incentives in the Medicare Shared Savings Program (MSSP)
  • In order to benefit from the shared savings program, ACO’s need to meet 33 quality metrics
  • ACO’s are monetarily rewarded to achieve (1) being more cost efficient while (2) providing better care for individuals and (3) providing better health for populations.

Telehealth is such a great match for ACO’s because they share the same goal … Making healthcare more efficient (bringing the right care to the patient at the right time) while increasing quality. Specifically,

  • Telehealth facilitates the coordination of care so that patients get efficient access to providers.
  • Telehealth enables patients to have access to their physicians at anytime from anywhere.
  • Telehealth helps reduce re-admissions and even unnecessary office visits

All of these operational efficiencies accrue to the ACO’s bottom line.

The ACO concept removes telehealth’s greatest adoption barrier – reimbursement based on a Fee-for-Service model.

As many experts will tell you, the fast adoption of telehealth has been held back for years because there has been poor or no reimbursement for telehealth services.

In other words, when providers spent time providing telehealth services, they would be taking away from the time they could be spending on services that provided more reimbursement.

Naturally, with the US Fee-for-Service model, the providers would be paid to focus on revenue-generating services rather than cost-effective medicine (including telehealth), however altruistic it might be.

The MSSP encouraged the formation of ACO’s in order to change providers’ financial incentives from Fee-for-Service to shared savings.

So unlike the traditional provider’s Fee-for-Service model in which providers get paid for everything they do, the ACO gets paid one lump sum in hopes that it will provide the best care possible for the patient.

In an ACO, the provider’s incentives for cost-efficiency are aligned with telehealth’s facilitation of operational efficiency. When organizations’ incentives are aligned (especially financially), they are more inclined to work with each other.

To summarize:

  • Telehealth enables the cost efficient care coordination that ACO’s need
  • ACO’s eliminate the Fee-for-Service-driven reimbursement hurdle that hurts telehealth adoption

In fact ACO’s must “define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth. A telehealth solution which can be shown to reduce an ACO’s costs can be very successful. 

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