5 Critical Questions You Should be Asking about ACOs: Part II

The Top 5 Questions to Ask about ACOs Last week I tackled the first 3 critical questions everyone should be asking about ACOs. This week I’ll address the last 2 questions that were part of a recent presentation given by Mike Morris, National Practice Leader of Dell Services Revenue Cycle Solutions, and Betsy Block, Director of ACO Solutions for Dell Services. I’ve included an online copy of this presentation at the end of the post.

4.   Are there any successful ACOs?

Yes! Here are 2 examples of eligible providers who earned money from their ACO participation:

  • Advocate Physician Partners is comprised of 8 hospitals, employs 3,400 physicians, treats 280,000 capitated lives, and adheres to 137 performance measures.
    • In 2005, they earned $12.4 million in incentive funds
    • In 2006, $16.7 million
    • In 2007, $25 million
    • In 2008, $28.2 million
    • In 2009, $32 million (estimated from a 2010 Value Report from Advocate Physician Partners)
  • Marshfield Clinic was a participant in the Physician Performance Group Demonstration. Theodore Paxel, MD, Medical Director of Marshfield’s Institute for Quality, said, “Our success year after year is the result of investment in a well-developed EHR and other tools to enable improvement.”
    • In year 1, they earned $12 million in savings to CMS and a $4.5 million bonus
    • In year 2, $13 million in savings to CMS and a $5.78 million bonus
    • In year 3, $16 million in savings to CMS and a $13.8 million bonus
    • In year 4, $35 million in savings to CMS and a $16 million bonus
    • In year 5, $34.5 million in savings to CMS and a $15.8 million bonus

5.   What IT costs are there?

Based on interviews with 4 facilities, here’s a breakdown of typical IT costs to implement an ACO, published by the American Hospital Association:

Cost Category

Start-Up

Ongoing

Developing Financial Management IS Systems

$500,000

$80,000

Disease Registries

$75,000

$10,000

EHR System

$2,000,000

$1,200,000

Intra-system EHR Interoperability

$200,000

$200,000

Link to HIE

$150,000

$100,000

Analysis of Care Patterns

$210,000

$210,000

Quality Reporting

$75,000

$75,000

Total (200-bed hospital) without an EHR

$3,210,000

$1,875,000

Total (200-bed hospital) with an EHR

$1,210,000

$675,000

If you’d like to scroll through the full deck, which includes more case studies and a more comprehensive breakdown of the IT components to consider, here’s a free online copy of the presentation:

View more PowerPoint from Stephen Outten
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