1. Angelo, Ellen Josephine MSN, RN, CCRN

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There's no question that healthcare reform is here to stay. Healthcare organizations, the manner in which reimbursement is allocated, and formal structures are predicted to undergo a major transition. Although healthcare leaders and consumers understand change will occur, it's unclear what will happen in the next 5 years. Whatever the changes entail, it's certain that high-quality care and patient satisfaction are demanded, with outcomes that are transparent to the public.

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Healthcare consumers have become increasingly more savvy. They tend to be more educated and have high expectations for service delivery by the multidisciplinary team. They're able to view websites that report information such as compliance with core measures and outcomes of physician practice at hospitals they may be evaluating for utilization. Hospital reimbursement is contingent in certain cases based on compliance, outcomes, and patient satisfaction, which are all publicly reported.


Insurance companies are demanding that best practices are implemented and consumers receive the right tests and treatments in a timely fashion according to diagnosis and/or physical exam. Gone are the days where patients were admitted to manage chronic disease processes. There are increased levels of scrutiny on admission criteria, eligibility, services provided, and readmission rates. The expectations of payers are that consumers have their acute condition cared for, are educated to prevent further occurrences, and discharged with outpatient instruction. Shorter lengths of stay may be an incentive to healthcare facilities based on reimbursement, which is currently opposite of physician fee-for-service payments.


One of the many options proposed under healthcare reform is known as accountable care organizations (ACOs). ACOs will likely be the catalyst that will change the manner in which healthcare is delivered.


What's an ACO?

An ACO is a local organization that integrates accountability for both the physician and healthcare organization aspect of care in order to decrease cost and improve quality. There has been a noted disparity across the country in regard to cost of services and quality outcomes. Often, care that costs more hasn't been associated with a higher level of positive quality outcomes. The goal of the ACO is to pay providers (healthcare organizations, primary care physicians, and specialists) utilizing a methodology that encourages the team to collaboratively work together and share accountability based on efficiency and high quality exceeding national benchmarks. The ACO may be rewarded or potentially penalized based on utilization and outcomes. According to Dartmouth Institute for Health Policy and Clinical Practice's director of population health and policy, "ACOs are really intended to help physicians get back in the driver's seat."1


The ACO model would provide a movement from health maintenance programs of the 1990s in which the insurers were the driving force and providers were paid based on a fee for service, not necessarily the care or amount of work that was provided. The ACO model provides a direct impact on physician and hospital performance. Medicare in particular is reviewing this approach. Multiple pilot sites, including Carilion Clinic in Roanoke, Va. (900 providers; 60,000 Medicare patients assigned), Norton Healthcare in Louisville, Ky. (300 providers; 30,000 Medicare patients assigned), and Tucson Medical Center in Tucson, Ariz. (50 providers; 5,000 Medicare patients assigned), have been implemented under the Dartmouth Institute for Health Policy and Clinical Practice in collaboration with Engelberg Center for Healthcare Reform at Brookings.2


Review of accountability in healthcare

There are several accountability models that are being considered under the ACO proposal. The following is a brief synopsis of each with defined relationships:3


* Professional model. Physicians and patients have a shared decision-making relationship. The physician is ultimately accountable to the patient.


* Economic model. The market is the determining factor for patient choice of providers. The patient makes decisions based on cost and quality. Healthcare is considered a commodity. When patients decide to leave their provider based on poor performance, the provider's revenue will drop, which will make them more inclined to correct the issues.


* Political model. Physicians and patients interact within a specified community.



Physicians are held accountable under a governing board. ACOs meld many characteristics from these models. The ACO will provide care that's coordinated and cost-effective. Patient satisfaction is key and may be a driver in reimbursement moving forward. The ACO will be accountable to a governing board that will make decisions based on evaluation to provide reward incentives or institute penalties. Elements of accountability will be inclusive of professional competence, ethical conduct, financial performance, access, public health promotion, and community benefit.


The two payments options under the ACO that are being evaluated by Medicare are a shared savings program based on a fee-for-service and a population-based capitation. The options for payment reform include a simple shared savings plan in which there's no risk for spending over the benchmark. There's a 2% threshold before savings can be distributed, and there's an even (50/50) shared savings split. This will most likely be a time-limited option. The shared savings and symmetrical risk have a split savings of 80/20 and will probably be the plan of choice for established ACOs. The partial capitation on ACO patient expenditures will be 20%, and the shared savings split will be based on risk of the last 80%. The capitation option will be used for advanced ACOs.4


Benefits and challenges of ACOs

There are a multitude of questions surrounding the benefits and challenges of implementing an ACO model. Some of the benefits that have been highlighted are physician accountability regarding the direct care provided and on the coordination of services and outcomes. The program would allow for patient preference regarding selection of facilities and/or providers. The billions of dollars that have been calculated as loss based on wastes in our healthcare systems can be redistributed to providers, hospitals, and other healthcare funding.


Many of the challenges that have been discussed are what types of models should be used under the ACO? Should reimbursement be based on a specific population and the cost efficiencies and quality associated with overall outcomes or only on a particular patient encounter? It may also be difficult to itemize how to disperse the financial incentives associated with achieving success. Physicians may be preoccupied with providing defensive medicine, and the rewards associated with being a partner in an ACO organization may not take the place when having to deal with one malpractice suit because a certain test may not have been done. In addition, most physicians today practice in more than one hospital. Will there be an opportunity to be a member of more than one ACO? Should participation in the ACO model be voluntary or mandatory? Some lawmakers feel the mandate would be a political nightmare.


Proposed implementation timeline

The proposed implementation timeline for those supporting the ACO model incorporates the following:5


* 2010. Ensure insurance coverage access for all, decrease waste in healthcare systems, conduct community assessments.


* 2011. Establish 10% Medicare bonus for primary care physicians/general surgeons, establish new Centers for Medicare and Medicaid Services (CMS) to implement service delivery models to decrease cost and enhance quality.


* 2012. Implement physician payment reforms that would encourage physicians to develop ACOs to reduce waste, readmissions, and improve quality.


* 2013. Initiate pilot program for payment bundling to improve coordination and integration of care throughout the continuum of care (hospital to postacute care treatment).


* 2014. Individuals can be fined for not holding medical insurance. Quality reporting will be transparent. Value-added care and removal of waste will be standard practice.



Role of the CNO in the ACO model

The role of the CNO in the ACO model is one that relies on a core competency of leadership accountability. The CNO is directly responsible for coordinating nursing care, which ultimately has a direct impact on patient outcomes and cost efficiency.


The CNO must set clear directions and expectations, along with setting forth actions for success. Providing a supportive environment that fosters employee engagement is key. Transformational leadership inclusive of a shared governance model leads to providing safe and reliable care. Waste is removed from processes moving forward to value-added opportunities supportive of employee and patient satisfaction.


The CMS now requires acute care organizations to report whether they're participating in clinical database registries for nursing sensitive care. Participation is currently voluntary, but as the healthcare reform initiatives move forward, it may become a mandatory requirement. Participation in these databases allows you to compare your information confidentially to other state and national organizations. The comparison helps to prioritize performance improvement activities.


The National Database for Nursing Quality Indicators(R) (NDNQI) has more than 1,500 hospitals participating in its database registry, which is more than one in four hospitals nationwide.6 Data are collected at the unit-based level and then compared with state, national, and percentile distributions. The nursing sensitive indicators include:


* falls


* falls with injury


* pressure ulcers (community-acquired, hospital-acquired, and unit-acquired)


* skill mix


* nursing hours per patient day


* RN job satisfaction


* practice environment scale


* RN education level and certifications


* pediatric pain assessment cycle


* pediatric I.V. infiltration rate


* psychiatric patient assault rate


* restraint prevalence


* nursing turnover


* healthcare-associated infections (ventilator-associated pneumonia, central line-associated bloodstream infection, and catheter-associated urinary tract infection).



These data allow for drill down at the unit level. The data collection supports transparency and doesn't allow poor performance to blend with high-performing units. The CNO is able to pinpoint and hold staff members accountable for their outcomes. The database also provides a method of assessing nurse staffing-to-patient outcomes. The NDNQI report can help CNOs with resource planning, risk management, and Magnet(R) application; satisfy reporting requirements; and support retention efforts.


Are ACOs the future?

There are varying opinions on the implementation of ACOs. The underlying premise is to enhance the accountability of the physician and healthcare organization and provide cost-effective care while achieving outcomes exceeding national benchmarks. The results of pilot studies will enhance and potentially answer the question: Are ACOs the right answer?




1. Healthcare-Economist. What are accountable care organizations? [Context Link]


2. Brookings-Dartmouth ACO Learning Network. Overview of the Accountable Care Organization (ACO) Model. [Context Link]


3. Emanuel EJ, Emanuel LL. What is accountability in health care? Ann Intern Med. 1996;124(2):229-239. [Context Link]


4. Health Reform Watch. A guide to accountable care organizations, and their role in the Senate's Health Reform Bill. [Context Link]


5. Wilson JF. Vermont healthcare reform aims for more coverage, less expense, and better care. Ann Intern Med. 2008;148(10): 797-800. [Context Link]


6. National Database of Nursing Quality Indicators. [Context Link]