Introducing Accountable Care Organizations (ACO)

Posted: November 19, 2015 - Benefits Consulting

Digital Benefit Advisors LogoImagine if Employers, Insurers, Brokers, and Healthcare Providers All Had a Seat at the Health Insurance Renewal Table?

Introducing Accountable Care Organizations (ACO)

The term ACO is foreign to most. While ACO’s have been around for some time, most people are just beginning to hear this acronym for the first time. This is because under the Affordable Care Act, the creation of ACO’s is encouraged in the Medicare program. In addition, various forms of ACO’s are beginning to appear in both the individual and group health insurance markets.

What is an ACO? An ACO is a network of physicians, hospitals, and other healthcare providers that work together in order to provide coordinated medical care to patients. An ACO is also accountable for making sure care is delivered in a financially responsible manner. Under an ACO, providers are no longer compensated solely on a fee for service type of system. Instead, providers receive compensation and bonuses for delivering high quality care and spending health care dollars more wisely.

How can an ACO potentially save money?

  • Technology. Using electronic medical records, providers can avoid unnecessary duplication of services. This also reduces the risk of medical errors.
  • Some ACO’s incorporate an on-site Nurse Case Manager at an employer’s workplace. Nurse Case Managers can help employees navigate the healthcare system, answer health-related questions, understand doctor’s orders, and coordinate care for chronic conditions.
  • Provider compensation. Providers have financial incentive to engage employees proactively, to make sure patients follow recommended treatment protocols, and to avoid unnecessary tests and services while following quality measures.

Skeptics claim that ACO’s will result in additional hospital and provider consolidation resulting in less competition. Greater provider market share could give providers a stronger hand at the negotiating table with insurers, leading to increased cost and fewer choices.

To learn more about Accountable Care Organizations, the Kaiser Family Foundation created a three minute video at: https://khn.org/news/aco-accountable-care-organization-faq/

As you enter future health insurance open enrollment meetings, please remember to bring an extra seat to the table. A seat that may be occupied by your healthcare provider or ACO.

John Jaeger

CDH has partnered with OneDigital to deliver a powerful new approach to employee benefits by combining the commitment of experienced, local market advisors with the sophisticated technology and resources of a respected national firm. As the employee benefits landscape becomes increasingly complex, we know the needs of your organization are shifting. John Jaeger and his team of dedicated benefits professionals are your personal experts in developing a strategic plan specific to your company’s business goals and employee initiatives. https://www.onedigital.com