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Accountable Care Organisations

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Introduction

Health care in the United States has undergone a lot of changes. Americans aren’t satisfied with the provisions and practises of the health care hence the senate enacted the federal health law which established the Accountable Care Organisations commonly known as the ACO’s. Indeed there was need for the incorporation of the health practitioners and organisations in order to have a smooth and orderly health system.

For many years the health industry has seen duplication of healthy duties and specifics, irrelevant and unproductive health policies and a number of interests which have made health care in America costly and beyond the reach of a common American. Hence the Obama administrations have come up with the guidelines to the Accountable Care Organisations which will perfectly ensure a controllable and effective health industry. ACO’s are frenzied to bring affordable healthy services and quality health care services through a quest of providing incentives and cushioning consultancy services.  Therefore, it’s then advisable that we look at what are ACO’s and its contents.

Definition of Accountable Care Organisations

An Accountable Care Organisation is an association of health care industry players to provide an accountable, quality, affordable and inclusive health care services. The Senate and Obama administration proposed this policy which will see the American health care reform at greater lengths. The major essence of this organisation is to unify the health care industry and put various players together, (Kovner, 2011).  The Accountable Care organisation seeks to ensure that the current separated health care system is brought together through one organisation. Therefore an Accountable Care Organisation can be concluded as an organisation that seeks to unite all health care players and activities so as to come up with an affordable, accessible and accountable service.  This program has been a blessing to the Americans, then what reasons that led to the creation of the wonderful program?

Essentials of Accountable Care Organisations

The issue of the basis of crafting of this program is divided into two. The first division will be the Senate idea and the second one will be based on the ideals of the health care players. The Senate lawmakers have been very cautious in the federal spending with the top objective being to reduce the overall national deficit. The Accountable Care Organisation proved to be within the standards of national spending reduction. Secondly there are expectations for the rise of the retirement costs for the elderly. Hence ACO’s will cushion the costs of these rising costs and ensure that the government spends less and at the same time the elderly get quality and affordable health care services. The HHS has estimated that ACO related Medicare will save up to $960 million for the first three years hence reducing the federal spending.  ACO’s are also expected to share services; professionalism and information hence also save some extra costs and also reduce unnecessary tests and procedures, (Berkowitz, 2011). For these reasons Congress thought it to be very essential to pass the Accountable Care Organisation Act.

Health care players also felt the importance of this program. The American health care industry is divided into a number of sections which has created divisions and duplication of work. You will get that a patient will seek the service of more than three Medicare institutions to get health care services when this service should be found in one Medicare. Also the costs of operating health care activities are high compared when they are united to be one. There is also interdependence between health departments hence the need to share information. For these reasons and many other reasons the health care players have adopted the ACO’s. ACO’s also provide incentives and health information to members from the federal government hence and additional benefit to industry players. In every way multi-speciality around hospitals and within professionals will lower costs and improve quality of health care services, these is achieved further by creating more accountability.

Definitely whether it’s the Senate or Congress or Health care industry reasons, the Accountable Care Organisations have objectives to create an accountable, reasonable and relevant health care institution in America.  ACO’s will surely bring a much needed change in health care.

Structure of Accountable Care Organisations

The Accountable Care Organisations Act became effective in January, 2012.  The act has a number of guidelines that will help in creation and management of ACO’s. The act provides elements that create and dismiss ACO membership and also guide ACO operations.

According to the Act, an Accountable Care Organisation is an association which jointly brings health care institutions, professionals and consultancy firms together. Then the organisation is given the duty to consolidate all the skills and services assembled in providing an affordable and quality service.

Formation of ACOs

Formation of ACOs has proposed by the HHS was that they should be formed nationally and also in every state. Their duties and responsibilities will range according to the regulations of HHS and within the capacity of achieving respective objectives of HHS.

Requirements and Basics of ACOs

Joining an Accountable Care Organisation is simple and voluntarily. It’s not a requirement for a medical institution to join an Accountable Care Organisations, it is a voluntarily program which is beneficial and important to the health care industry. A paper written by the veteran medical writers Kelly and Robert characterises Accountable Care Organisations into three. An Accountable Care Organisations should be able to provide and manage effectively patients, ensure that there is continuum care across institutional settings. These services should also cover ambulatory and inpatient hospital care. Kelly and Robert denote this characteristic has the main purpose of creating a Accountable Care Organisations. It is essential that there is manageable provision of health services to patients in every field. Co-ordination and fast response of ambulatory and in-patient services are also key.

The second characteristic of an Accountable Care Organisation is the capability for a prospective financial budget and management of resources. ACOs should be able to create prospective budgets and manage effectively the resources available. One of the major reasons for the Senate to adopt the Accountable Care Organisations Act was the perception that it will reduce the federal government spending in the health care. Hence it’s a requirement for an Accountable Care Organisations to create balanced and prospective budgets. They also need to use the available resources effectively and satisfactory.  Investment at the Accountable Care Organisations requires that members to share all kind of savings that results from their cooperation and co-ordination. Indeed it is a policy that can guide in dealing with overutilization and underutilization of resources between members, (Bard, 2012).

The third characteristic is sufficiently sizeable enough organisation to support a valid and reliable performance measurement and information system. Accountable Care Organisations should have a information system which they use to communicate with members hence promote team work and association activities. Also they act as a performance measurement tools in the health care field.

Accoutable Care Organisations Programs

The Accountable Care Organisations program offers three extensive programs. The first program is the Medicare Shared Savings Program. The Medicare Shared Program is a program for fee-service Medicare institutions who are members of Accountable Care Organisations.

The second program is called the Advance Payment Initiative program. He advance Payment Initiative program is for a particular selected member of the above Medicare Shared Savings Program. It involves health care services that have been paid in advance.

The third and last program is the ACO model. It is a program that has been designed to for early members who adopted the Accountable Care Organisations policies earlier enough.

Accountable Care Organisations are much similar with the current insurance and healthcare policies, the only difference is that Accountable Care Organisations are much more organised,  affordable and quality health care service. Hence Accountable Care Organisations are much better than the existing programs.

Accountable Care Organisations FTC Requirements

The Federal Trade organisation has set up requirements that Accountable Care Organisations should abide with to ensure effectiveness and legality. As per the described above requirements the FTC with the HHS have crafted inclusive provisions that are supposed to guide the Accountable Care Organisations. The following is summary of the final rule that was given out.

The FTC has categorised Accountable Care Organisations into three. The first category is accountability and beneficiaries. The basics of accountability are that members who willingly associate with Accountable Care Organisations should be accountable for the cost, quality and the overall activities assigned to it.  The Accountable Care Organisations is given the authority to ensure that members at best of their knowledge are willing to be accountable to, report to the FTC on matters of cost and Medicare quality and the overall health care performance. The FTC has also recommended that Accountable Care Organisations participants are certified that they can do the above and when they have performed them. The FTC has indicated that accountability is the top priority requirement for any Accountable Care Organisations participant and should be regarded with high regard.

The second category is the agreement requirement. The FTC recommends that Accountable Care Organisations should sign an agreement with the ACO secretary to provide Accountable Care Organisations for period not less than three years. The major Accountable Care Organisations program, Shared Savings program should also have a three years participation period with the binding of the Accountable Care Organisations executive. The signed participation agreement should be represented to the FTC prior the binding of the agreement by the executive who have the powers to act on the same. The second category discusses much further on the certification and legality of the agreements. The FTC and HHS have given authority and power to the Accountable Care Organisations executive to ensure that participant agreements are binding and certify the same.

The third category is the requirement on the number Medicare providers and beneficiaries.  The HHS and FTC have provided regulations that Accountable Care Organisations should primary care professionals and average FFS beneficiaries. They have recommended that Accountable Care Organisations should be assigned not less than 5,000 beneficiaries. The FTC used a methodological assignment to determine the average beneficiaries per a particular Accountable Care Organisations and their per capita each agreed year. The eligibility process will be considered according to the number health services an institution has and the value of the skills available. Then this process will be done in the every single year of the agreement.

The Current Status of Accountable Care Organisation

The current status of Accountable Care Organisations is basically based on the Accountable Care Organisations activities and changes in the ACO operations. Nathan Laufer, 2011, in his article “A review of the Current Status of Accountable Care Organisations” has stated that since the inception of ACO’s much has changed in the healthcare industry. There has been indications of changes in the provision of health care; positive changes. But considering the prospects of the ACOs much are yet to change.

The Accountable Care Organisations has brought together a pool of Medicare professionals and institutions. The basis principle of Accountable Care Organisations is accountability; therefore we have seen changes and increase in accountability of the healthcare industry. Professionals and institutions have been united and cooperate to provide health care services and they are really doing a good job. The concepts of Accountable Care Organisations are provision of primary care, sharing of savings resulting from cooperation and co-ordination and a unified budgets and service availability. All these concepts have not changed as private and public institutions are calling for more emphasis and undertaking in the program.

The Accountable Care Organisations programs have not changed. We still have the common three programs with Shared savings program being the common one. Joining Accountable Care Organisations is a voluntary action but there is still preservations for all stakeholders, small, middle-sized and large organisations to join. A recent study by PriceWaterhhouseCoopers consulting firm indicated that a two sided Accountable Care Organisations which have 5,000 beneficiaries are earning up to $1.3 million and generating up to 5% savings. The same ACOs were also fined $420,000for increasing costs by 5%. These statistic have also dismayed a number of health care executives as the gains are not such interesting. They feel that Accountable Care Organisations program is complex, untested and highly punitive program, (Parks, 2012).

Also the HHS proposal on the variations of patient assigning is working very well but questions are being raised on the reliability of the method they are using. According with the FTC and HHS regulations, patient assignment will be based on evaluations on the services and skills found in a particular Medicare institution. The method can not prove that irrespective of the skills and availability of the services if the institution can be able to manage to provide quality and timely services.  The Obamacare passed a couple of weeks ago also has also been quoted to be a disadvantage to the ACO’s.

In a summary there are not many changes in the ACO business considering that it came into effect on January this year. The changes that we are experiencing are the adoption changes whereby health care professionals and organisations with the Department of Health and Human resources tasked in implementing this essential program. What we may expect in the next one year may be different and then the status my change but there are high expectations for the success of the program.

Benefits of Accountable Care Organisations

Accountable Care Organisations have been prophesied to be a very beneficial to the current health care industry. Accountable Care Organisations as discussed above are organisation which is looking at unifying the health care industry so as resources and services may be readily available, affordable and qualitable. Therefore, the following are some of the benefits that can be derived from associating with Accountable Care Organisations.

The first and major benefit is the provision of quality health care services.  It has been a problem in the United States to get quality Medicare services at a specific; you will have to test the service of this and that to be sure. Accountable Care Organisations have revolutionarized health care services.  This how they do it: Accountable Care Organisations involve putting together a number of Medicare institutions and Medicare professionals; hence this combination ensures quality services. The co-ordination and cooperation of professionals and institutions are key in establishing an institution with enough resources and skills which at the end of the day ensures quality healthy service.

The second benefit of Accountable Care Organisations is the provision of affordable health care services. Currently we are facing an economic crisis with the federal deficit increasing each year, Congress and the Federal government are looking for ways to reduce expenditure and Accountable Care Organisations is the best bet in the health care sector. The amount of money channelled to the health care sector through the Accountable Care Organisations is less than the usual money spent by the Federal government. Secondly, Accountable Care Organisations are much affordable to individual Americans as they can get the service at one place. Currently getting all the health care service at one place is not easy hence expensive to get one health care service in one institution and another at the other institution. Therefore Accountable Care Organisations are accountable in ensuring that they provide affordable health services and co-ordinate to provide all services at once, (Centers for Medicare & Medicaid Services, 2012).

The program is also saving so much of heath care institution costs through cooperation and co-ordination with other institution. It is practical that when an institution operates alone the costs of operation are high but cooperation and co-ordination with other institutions sees it share resources and skills which one of the institution does not have. This coordination activity reduces the overall operation costs. Accountable Care Organisations are also ensuring accountability of Medicare institutions and professionals. As part of joining an Accountable Care Organisations, a health care institution or firm is supposed to sign an agreement of accountability for the cost and quality of health services.  Hence health care institution is tasked to provide affordable and affordable services. Also as a beneficiary you do not have to seek the required institution, you can seek service elsewhere and still your ACO provider pay for it.

Accountable Care Organisations Limitations

The Accountable Care Organisations has been a blessing to many people in the United States but it does not lack a little limitation. It is believed that the mathematical theory of savings from the Accountable Care Organisations is actually wrong. A recent survey indicated that the amount of savings that can be salvaged from the ACO investments is very low compared with the investment put on it. The ideology is that ACO investment are so huge hence the savings associated with it should also be high but a  forecast show that for every ACO investment only 5%  will be saved, a discouraging result.

The overall initial costs are also said to be high. A number of health care institutions have been reported using millions of dollars in ACO consultancy services and other extra costs. When we compare these costs with the returns that a health care institution could get there is a small percentage returns.  A recent Congress report on the progress of Accountable Care Organisations has indicated that the overall initial costs of setting up and provision of ACO service is far high and not within the guidelines of Congress on Health care. This has provoked a lot of questions whether ACO investment is really affordable or not. The initial costs of Accountable Care Organisations has proved to be high with reports of low returns, these has made a number of health care institution Executives to have second thoughts. The Congress has also indicated in the latest controversial report that ACOs have increasingly made health care costs high and compromised the quality of health care. Also the extra accreditation costs which are involved in joining of ACO. These extra costs also add up to the start –up costs and become high.

The Accountable Care Organisations program is disadvantageous to small and individual health care institutions. The number of small and individual practises are high than large hospital organisations. The basics of the ACO program are to provide health services to a large pool of patients hence small and individual practises cannot manage. These will force them to shut down or merge with bigger institutions or other practises in order to be at level with the ACO requirements. The cost-sharing program is also perceived by many Americans that it will not work, hence not many people who have signed or advocated for the program. These have made ACO unpopular leading to low ratings among the common Americans, (Dr. Berwick, 2012).

At the same time Physicians have complained of close government involvement and control. Medical practice needs a lot of independence hence government involvement is curtailing the progress of health care services. The Physician performance is also being scanned by all health care stakeholders including patients hence making them uncomfortable in their jobs hence low quality service delivery. They also are supposed a lot of rules and procedures which are increasing bureaucracy in health care. These reasons are curtailing the performance of Doctors at a greater lengthy.

The Accountable Care Organisations regulations are also unclear. A number of the policies and regulations prescribed by the ACO Act do not give enough light on the performance of ACOs, their regulation and treatment of default heath care institutions. Unclear regulations go hand in hand with lack of knowledge and ignorance of a number of health care players and medical practitioners. They are either having no interest on ACOs or are reluctant to learn about them, making it very difficult to sell the ACO message and implementation. These challenges are made worse with delayed payments and long payment logistics from the government. Accountable Care Organisations are having performance problems due to delayed payments from the federal government hence corrupting the Medicare service progress. This is due to long payment logistics by the Federal government. The Federal government is also experiencing problems in putting down the implementation logistics.

Conclusion

Accountable Care Organisations have become popular in the United States of America. Its implementation and adoption has been faced with a number of challenges. These challenges have discussed above and have hampered the success of ACOs. But the government is embracing a number of policies to help promote the program and the health care sector has taken a positive look on the program and is implementing it. It is a fact that when a new health program has been unveiled there are a number of challenges it can face from adoption to implementation. The ACO policy is also facing trying moments. We should also not forget the limitations of these program, they are quite a number.

The prospect of the ACO is to ensure provision of quality and affordable health services to the American citizen. It is headed there and for a short time we have seen how it’s capable. But then the Federal government need to evaluate the available ACO limitation and revisit the contents of the policy so as to recreate it for the better. Indeed Accountable Care Organisations program is a huge and affordable program to the Americans.

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