Introduction

Much is being written about the formation, reimbursement and partnership structure for the Accountable Care Organization (ACO). Far less frequently described are proven programmatic approaches used to accomplish systemic, cross-partner improvement strategies, which is fundamental to improving quality outcomes efficiently and at reduced costs. This lack of practical guidance leaves leaders of healthcare organizations with little direction for building, then replicating, systems and strategies for newly emerging Integrated Delivery Systems (IDMs) and/or ACOs.

Through hands-on ACO experience, the authors understand the challenges inherent with ACO partnerships and have formulated practical solutions to avoid or resolve them. In a three-part series, the authors will provide a new working model to organize and effectively run a multi-partner arrangement, supporting population health-level as well as individual-level data needed to track and trend improvements in outcomes over time. We address the three critical challenges in forming and working within an ACO and offer practical solutions, techniques and tools to address these challenges.

  • Article One: Structuring the ACO partnership with organizations that have different capabilities, resources, governance and strategy
  • Article Two: Developing a highly functioning ACO team measured through timely and measureable results
  • Article Three: Executing on the lifecycle of ACO interventions, from ideation through sustainability

Part one of our three-part series addresses the structural challenges faced when organizations and provider groups differing in size, capabilities and culture join together to form an ACO partnership. We will highlight significant pitfalls and propose techniques to avoid them.

Structuring the ACO

When physician groups, insurers and hospital systems come together to form an ACO, a common issue we have experienced is that often each partner offers similar services (e.g., Care Coordination) to the same ACO population. Typically, each organization offers services which may be duplicative or can be construed as competitive services. How then does one partner cease an operationalized service just for ACO members in lieu of another partner delivering this service? Or, are overlapping services coordinated by the ACO? This pitfall is amplified by the milieu of ACO pilots, where scalability and sustainability is unknown. Examples of service overlap include:

  • Care Coordination
  • Disease Management
  • Nurse Advice Line
  • Services Call Center
  • Online Health Information
  • Member/Patient Communication

Recommendations
We recommend developing a matrix of all ACO-related services that partner organizations deliver. Then, examining service quality, cost and outcomes, ACO leadership agrees on which partner is best positioned to deliver each ACO service and then confirm operational viability (for example, how to efficiently direct ACO members to the appropriate service provider). Often required is a “re-conceptualization” of existing services so that a “best in class” service offering takes its place. (In our next article, we’ll discuss the socioadaptive and behavioral change leadership skills required to support innovation and creation of a new and shared vision for service offerings.) Developing a common set of data metrics and measures will assess the effectiveness, through quality, cost and outcome, of the ACO services which are then refined and improved over the course of the ACO.

A second issue we have experienced with newly forming ACOs is that each organization has its own marketing and communications strategy with their members / patients, physicians and employer groups. When each organization fails to establish new messaging consistent with an integrated ACO brand, the result is confusing and ineffective communication to their stakeholders, even when great cost is spent on various campaigns. This is true regardless of the platform of communication, such as web based, email, mail and product offering. An example of disparate messaging is highlighting benefits and value to patients who join the ACO – what makes the ACO unique from other systems of care? Each partner may advertise and communicate differently, causing confusion and diluting the ACO’s cohesiveness:

  • Health Plan: “Lower cost”
  • Primary Care Provider: “Better access to care team”
  • Hospital: “Care coordination”

Early in the formation of the ACO, we recommend the leadership team decide and commit to the level of coordinated communication, messaging and branding. Developing an integrated marketing and messaging campaign will provide patients, members, physicians and employers a sense of value and exclusivity with the brand, thus bringing in more members and raising the engagement of each partner in the delivery of ACO services. Since direct communication from each partner to their constituency is always necessary, develop an overarching communication schedule to build awareness of what members are receiving and to identify areas for joint communication. For example, promoting ACO services, identifying neighborhood urgent care centers, and encourage choosing PCP are opportunities to communicate collectively). Evaluate websites for inconsistent messaging and include navigation to other partner websites. Identify specific measures in which to track results from communications and refine over the course of the ACO.

Another pitfall we have experienced within an ACO is varying capabilities across partner organizations, including financial, operational, resource skills and versatility. Different organizations necessarily have varying capabilities to offer the ACO partnership. The impact to the ACO may include partner dominance, slower progress on cross-partner activities due to ‘lowest common denominator’ and varying levels of senior leadership commitment across partners. A manifestation of this pitfall includes the speed at which signification decisions are made. Each partner may have a different ACO governance structure in which decision-making occurs. One partner may include the decision maker in the ACO leadership team. Another may have a proxy, who then escalates their organization’s governance structure which meets monthly. Another partner may have a tiered decision-making process that is not timely.

We recommend performing an upfront assessment of each organization’s capabilities in supporting the ACO, such as financial support and commitment, resourcing, governance structure, data and reporting maturity and operational flexibility. Acknowledge the differences, shore-up capabilities as possible, determine the remaining challenges then develop mitigation strategies. Based on the assessment, establish realistic expectations for each partner, communicate to ACO governance bodies and manage throughout ACO development and implementation.

A final inherent pitfall we highlight in this article is various ACOs forming in a single community or region that may be in direct competition on specific programs, services or patient populations. How then are such competitors meant to partner in an ACO framework? Given the competitive landscape in which ACOs are forming, and each partner needs to differentiate, is there an opportunity for standardizing, working together, sharing success and lessons learned to reduce inefficiency and waste produced by individual ACO efforts?

We recommend acknowledging this challenge up front, transparently and head-on. Identify what is proprietary to each partner and what can be shared. Bring senior leadership from competitive organizations together to develop mutually beneficial solutions that align with overarching ACO goals and direction. Think broader than a single ACO and identify opportunities for all ACOs serving the community. With an eye towards supporting long-term, fundamental change in healthcare, coalesce on cost-effective, mutually-beneficial, care-enhancing and innovate mechanisms to work together while maintaining unique and competitive organizations.

Conclusion
The themes in this article highlight the ramifications if a newly formed ACO does not perform due diligence and discovery in the areas of partner service offerings, communication, capabilities and inherent competition. The authors’ solutions emphasize cohesive branding and communication and ‘best in class’ service offerings. Understanding the assets each organization can bring and which assets are competitive to one another must be identified and discussed early on if ACO partners are to truly partner!

About the Authors
Shani Trudgian is a Partner at Kenny & Company and has over 20 years consulting experience with Accenture, Deloitte and Freed Associates. As a thought leader and industry advisor, Shani has guided her clients through health reform readiness strategy, ICD-10 readiness approach, ambulatory heath care delivery refinement, business model analysis, organizational development, change leadership and in other strategic areas. Shani’s industry experience includes medical groups/IPA, hospitals, health plan (public/private), safety net clinics, department of public health, dental insurance, oral health delivery, non-profit grant-making philanthropy, and behavioral health organizations. You can contact Shani at This email address is being protected from spambots. You need JavaScript enabled to view it..

Over the last 30 years Julie Kliger has been measurably improving outcomes in hospitals and health systems. She has done this by applying Performance Improvement (PI), Change Management and Leadership Development principles into large, complex health care organizations. Ms. Kliger is a published author and her articles can be found in the Agency for Healthcare Research Quality (AHRQ), Archives of Internal Medicine (April, 2010), Joint Commissions’ Journal on Quality and Patient Safety (Dec, 2009 and Feb, 2012), Journal of Nursing Administration (March, 2010) among several other notable publications. She has been an invited speaker at numerous national conferences including, Joint Commission, National Quality Forum, University Health Consortium (UHC), RAND Corp., Stanford University, American College of Emergency Physicians (ACEP), BMJ’s International Conference, Robert Wood Johnson Foundation (RWJF), Moore Foundation, Institute for Healthcare Improvement (IHI), American Organization of Nurse Executives (AONE). Ms. Kliger completed her Master’s in Public Administration at Harvard University’s Kennedy School of Government where she focused on patient safety and error reduction policies. She holds a Bachelor’s of Science in Nursing from Columbia University in New York City and a Bachelor’s of Arts from UC Berkeley.

About Kenny & Company
Kenny & Company is an independent management consulting firm providing Strategy, Operations and Technology consulting services to our clients. Our management consulting practice, experience and insight also enable us to provide early stage venture capital investments and management consulting guidance to select startup companies, and through our philanthropic endeavors to give back to our communities.

This article was first published on www.michaelskenny.com on October 10, 2015.

The views and opinions expressed in this article are provided by Kenny & Company to provide general business information on a particular topic and do not constitute professional advice with respect to your business.

Field Guide to Effective ACO Management by Shani Trudgian, Kenny & Company is licensed under a Creative Commons Attribution-NoDerivs 3.0 United States License . Kenny & Company has licensed this work under a Creative Commons Attribution-NoDerivs 3.0 United States License.