By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    improving patient experience
    6 Ways to Improve Patient Satisfaction Within Hospitals
    December 1, 2021
    degree for healthcare job
    What Are The Health Benefits Of Having A Degree?
    March 9, 2022
    custom software development is changing healthcare
    Digital Customer Journey Mapping and its Importance for Healthcare
    July 21, 2022
    Latest News
    6 Easy Healthcare Ways to Sit Less and Move More Every Day
    September 10, 2025
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Feinberg’s Simulation-Based Training Program Wins Innovations Challenge
    November 16, 2012
    ACA Delays
    Top 8 ACA Delays: Blatantly Illegal or Temporary Courses of Action?
    July 7, 2014
    Vegetarina Dental Concerns Marielaina Perrone DDS
    Oral Health Concerns For Vegetarians
    February 14, 2013
    Latest News
    Healthcare at a Crossroads: Why Leadership Matters More Than Ever
    September 9, 2025
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: What ACO Obstacles Are You Facing?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > What ACO Obstacles Are You Facing?
BusinessFinanceHospital Administration

What ACO Obstacles Are You Facing?

Abby Norman
Abby Norman
Share
7 Min Read
Triple Aim of an ACO
SHARE

Triple Aim of an ACOWhile many have been quick to defend the slow rise of Accountable Care Organizations (ACOs), many others are looking not at the slowness of the climb, but the inconsistency. 

Contents
  • Types of ACOs
  • ACO Obstacles
  • ACOs | Patient Needs vs. The Bottom Line
  • ACOs | Physician Leadership
  • ACOs & The Future

Triple Aim of an ACOWhile many have been quick to defend the slow rise of Accountable Care Organizations (ACOs), many others are looking not at the slowness of the climb, but the inconsistency. 

Circling back to the entire point of ACO formation in the U.S. there were two distinct motivations:

1) the care previously provided by independent physicians was more often than not uncoordinated and

More Read

Medicare Spending by Program Service Categories, 2010
Integrating Chronic Disease Management With New Health Delivery Mechanisms
Pay More, Get Less: US Healthcare in a Nutshell
Shared Risk Reimbursement: 5 Challenges and Opportunities for Radiology
Custom Publishing: Take Control of Your Brand

2) the fee-for-service payment model was inefficient and made the incentive for physicians providing more care not necessarily good care.

The solution, then, appeared to be that we should implement some kind of system where physicians pool together to treat patients- something that can happen even in the non-physical realm with the advent of the electronic health record- and change our payment model to reflect not quantity of services, but their quality.

Types of ACOs

Thus, ACOs were born. And in theory, they seem to be a superlative solution to the two major problems in modern healthcare. In practice, however, they appear to be coming up short.

There are reported to be around 600 ACOs in the United States currently, and they are subdivided into three different models:

  • Medicare Shared Savings Programs are a combination of calculated cost and fee-for-service payments, both are determined by a physician’s previous performance measures. Thus far, of the 114 programs around 54 have actually achieved savings within the first year.
  • Pioneer ACO models are the brainchild of the Center of Medicare and Medicaid Innovation (CMMI). They are geared toward practices or groups that already have a solid infrastructure for dealing with prepayment and while they may have seemed to be a good idea initially, within the first year as many as a third of program participants withdrew.
  • Commercial ACOs encompass far more arrangements that might appeal to hospitals undergoing ACO transition, and as many as half of the ACOs in the United States are in this category. The upside of these programs is that many hospitals have met their quality outcomes, but there has been no consistent, demonstrable cost-savings.

ACO Obstacles

The major factor that is complicating ACO’s success are, as previously mentioned, that they need to overcome the prevailing fee-for-service model. Since the goal is to improve value over time, to give up the fee-for-service model which is currently sustaining hospitals is an enormous leap of faith that many hospitals aren’t sure they can afford to take. While the idea of creating sustainable solutions to healthcare’s many problems seems noble enough, the fact of the matter is, a decrease in revenue from abandoning the relatively easy fee-for-service payment model is a daunting prospect.

While no one wants to provide subpar care, the truth of the matter is, patients have more complex health needs than ever before and they also have more access to information – much of which can be confusing and conflicting – meaning they are more involved than ever in their own care. Doctors understand that times are changing, but to move away from a familiar payment model is challenging.

ACOs | Patient Needs vs. The Bottom Line

The patient’s needs and the financial bottom line are at odds in a big way, and it’s going to be incredibly difficult to reconcile the differences. What adds to the difficulty is that while technology seems to be advancing at the speed of sound, hospitals that are already financially hard-pressed are not exactly embracing these time consuming – and wallet draining- programs. Furthermore, the Meaningful Use requirements set forth from HiTECH legislation indicate that interoperability is the end-all be-all of the programs, but anyone who has experience with EMRs knows that this is far easier said than done. Even when the electronic records are in working order and aren’t in the midst of a major upgrade or technical glitch, user – confidence is an ongoing issue that hospitals have to face. The reality is, the generation of doctors, nurses and allied health professionals who are being asked to incorporate these electronic systems into their workflows did not grow up with computers in their classroom and they aren’t all that interested in making huge changes. The next generation of health professionals is between a rock and a hard place: being educated by traditional physicians who demonstrate resentment toward change on principal, but still expect their underlings to abide by the most current legislative practices.

ACOs | Physician Leadership

For top tier physicians who have built their entire careers around the fee-for-service model of payment, the idea of making such an enormous process change at this phase of the game probably seems impossible. Similarly, it’s unlikely that they are interested in leading the charge for reform when they may not be able to see, fully, how the fee-for-service model has corrupted the healthcare system. And if there is a lack of physician leadership, the next place to look is administrative leadership. Likewise, if the CEO has not embraced the concerns and perspective of the physician leaders, a chasm between these two leaders will only cause the hospital to crumble.

ACOs & The Future

It’s probably too soon to tell if ACOs will succeed in the long term – and certainly, they are off to a shaky start. Healthcare is at a major turning point and if hospitals and their leaders can figure out how to face these obstacles rather than resist them, that will be the true test of whether ACOs will sink – or swim.

TAGGED:ACO
Share This Article
Facebook Copy Link Print
Share
By Abby Norman
My name is Abby Norman and I am a healthcare blogger. With over 10 years of experience in the medical field, I have developed a passion for helping others understand the complexities of healthcare.

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

a woman walking on the hallway
6 Easy Healthcare Ways to Sit Less and Move More Every Day
Health
September 9, 2025
Clinical Expertise
Healthcare at a Crossroads: Why Leadership Matters More Than Ever
Global Healthcare
September 9, 2025
travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025

You Might also Like

collaborative conflict in healthcare
Hospital Administration

Collaborative Conflict

December 12, 2013

Can We Use Humor to Advertise Our Hospital? Don’t Make Me Laugh.

January 8, 2013

FDA Fired Device Whistleblowers

January 30, 2012
Medical Necessity
BusinessHospital Administration

Best Denial Management Strategy: Avoid Denied Claims

January 30, 2015
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?