378 pages | 28 B/W Illus.
An accountable care organization (ACO) is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned group of patients. Accountable Care Organizations: Value Metrics and Capital Formation explores the historical background and evolution of the ACO model as the basis for the development of the value metrics and capital formation analyses that are foundational to assessing the current efficacy and capacity for change.
The book examines the four pillars of value in the healthcare industry: regulatory, reimbursement, competition, and technology in addressing the value metrics of ACOs, including requirements for capital formation, financial feasibility, and economic returns. It focuses the discussion of non-monetary value on a review of aspects of population health within the context of such objectives as improved quality outcomes and access to care.
The book examines the positive externalities of the ACO model, including results for third parties outside the basic construct of the ACO contracts shared savings payments. It also discusses the potential role and opportunities for consultants in assisting their provider clients in the consideration, development, implementation, and operation of an ACO.
"Accountable Care Organizations is the first comprehensive text on capital formation and value metrics for this new healthcare business model… I can think of no one more qualified to write it than Bob Cimasi at Health Capital Consultants … it is destined to become a classic work … read, review, refer, and profit by this valuable resource."
—Dr. David Edward Marcinko, FACFAS MBA, Institute of Medical Business Advisors, Inc.
"The author offers various models and policy initiatives, some of which are in partial test, and updates on other initiatives at beginning stages of organization."
—Blue Heron Journal, March 2014
An excerpt from the foreword:
Although many authors, including the one writing this foreword, have previously attempted to explain the ACO concept in practical terms, virtually no one thought to thoroughly analyze the financial underpinnings of this model until Bob Cimasi decided to write this book. What an ambitious work it is! Even though most existing ACOs remain gestational or in their earliest years of operation, Mr. Cimasi and his associates at Health Capital Consultants have managed to assemble an authoritative body of information on this rapidly evolving subject and to present their findings in an easily understood manner.
Together with many of my colleagues in the American health law bar, I have long respected Bob Cimasi’s passion and talent for unraveling complex healthcare equations and objectively assigning value to all or part of a business or relationship. That was difficult enough to do in a traditional fee-for-service environment; it will be much harder as the nation transitions to shared savings, bundled payments and other new methods of value-based purchasing. With the publication of Accountable Care Organizations: Value Metrics and Capital Formation, readers will now have insight on the principles and methods Mr. Cimasi and his team of experts carefully use to appraise transactions within a changing healthcare payment and delivery system. This text is much more than a compilation of educational resources on a currently hot topic. Rather, it could become a seminal work relied upon by all stakeholders in a transformed healthcare marketplace. I cannot think of anyone more qualified than Bob Cimasi to take on such a daunting task.
It is always a privilege to be asked to read a manuscript before it becomes publicly available. This time, however, I found reading Accountable Care Organizations: Value Metrics and Capital Formation to be like looking through a window on a brave new world. I found myself asking: is this finally the way Americans will learn how to assure quality, efficiency and fairness in one of the most important aspects of their daily lives? I hope the readers of this book will be challenged to ask that same question as they seek to understand the ins and outs of ACOs.
—Peter A. Pavarini, Esq Partner, Squire Sanders (US) LLP, July 2012
Background and the Path to ACOs
History of Accountable Care
History of Managed Care
ACO: Another Name for Managed Competition
The Path to Accountable Care Organizations
Setting the Stage for ACOs: An Environment Demanding Change
Purpose of Accountable Care Organizations
Overview of Value-Based Purchasing
The Patient Protection and Affordable Care Act (ACA) and the Medicare Shared Savings Program
Overview and Intent of the MSSP
Related Affordable Care Act Provisions
Center for Medicare and Medicaid Innovation
Value-Based Purchasing Demonstrations
Medical Home Model
Bundling Demonstration Project
MSSP Proposed Rule
Overview of the Main Provisions of the MSSP Proposed Rule
Significant Changes between the MSSP Proposed and Final Rule
MSSP Final Rule
Accountable Care Organization
The ACO Agreement
Accountability: The Assignment of Medicare Beneficiaries
Quality and Other Reporting Requirements
Monitoring and Termination
Shared Savings Payments
Subsequent ACO Models under Development
Pioneer ACO Model
Advanced Payment ACO Model Initiative
Accelerated Development Learning Sessions
Proposals for State Payors: Medicaid ACOs
Industry Feedback and Agency Response
American Hospital Association (AHA)
American Medical Group Association (AMGA)
American Medical Association (AMA)
American Academy of Family Physicians (AAFP)
America’s Health Insurance Plans (AHIP)
Physician Group Practice Demonstration Project Participants
Medicare Payment Advisory Commission
Commercial ACOsWhat Are Commercial ACOs?
Distinguishing between Federal ACOs and Commercial ACOs
Coordination of Care
The ACO Agreement
Quality and Other Reporting Requirements
Tiered Payment Models
Shared Savings and Losses
Hypothetical Models for the Development and Operation of ACOs
Single Healthcare Organization Structure
Competitive Marketplace Challenges
Impact of ACOs on the Healthcare Industry: Addressing Industry Concern
Impact on Providers
Capital Finance Considerations for the Development and Operation of ACOs
History of Healthcare Financing
The Financial Crisis: 2007–2009
Financial Feasibility Analysis for ACO Investments
Case Studies: Real Investments of Capital
The Investment Decision
Cash Flow Analysis
Payback Period and Discounted Payback Period Methods
Net Present Value
Internal Rate of Return
Further Feasibility Analysis
Considerations of Value for the Positive Externalities of ACOsDefining Value
Value to SOCIETY
Cost of Healthcare
The Role of the Healthcare Consultant
Economic and Financial Consulting Services Relevant to ACOs
Value Metric Services
Financial Feasibility Services
Valuation (Financial Appraisal) Services: Establishing Fair Market Value and Commercial Reasonableness
Selecting and Working with Consultants
Consultant Skills and the Body of Knowledge
Organizational and Strategic Capabilities
The Consulting Process
Data Gathering & Research
The Consulting Analytical Process
Reporting of Consulting Engagement Deliverables