ACOs Will Need Automation Tools To Do Population Health Management

Updated on May 3, 2011

By Richard Hodach

The rising interest in accountable care organizations (ACOs) springs from two factors: the Medicare shared-savings program for ACOs, which begins in 2012, and healthcare providers’ belief that major changes in reimbursement methods lie just ahead. But what most hospitals and doctors still haven’t come to grips with is how their entire business model must change to accommodate the requirements of ACOs.

To build a successful ACO, providers must collaborate to coordinate care and to maintain or improve the health of all of their patients. Achieving these goals depends on the ability of providers to become clinically integrated and to manage population health at the physician practice level.

Both of these capabilities require the use of health information technology that goes beyond electronic health records. Supplemental technologies will use the data in EHRs and other information systems for tracking, monitoring, educating, and proactively reaching out to patients. The aim is to engage all patients—regardless of the state of their health—and to ensure that they receive the recommended preventive and chronic care.

Payers Encourage Formation of ACOs

The Patient Protection and Affordable Care Act (PPACA) turned the ACO concept into reality by authorizing the Centers for Medicare and Medicaid Services (CMS) to set up a shared-savings program, starting January 1, 2012. This is a full-scale effort to incentivize healthcare providers to form organizations that are capable of improving quality and cutting costs.

Under CMS’ approach, an ACO that meets specified quality goals will be able to split with CMS any savings that surpass a minimum level. An ACO must include primary-care providers and must serve at least 5,000 Medicare patients. Among the organizations that might qualify are: large group practices, independent practice associations, physician-hospital organizations, and integrated delivery systems.

ACOs Change Business Paradigm

Whatever the degree of financial risk in particular ACO contracts, all of them will require providers to use a population health management (PHM) approach.

Population health management emphasizes “the health outcomes of individuals in a group and the distribution of outcomes in that group.” It addresses longitudinal care across the continuum of care, and personal health behavior that may contribute to the evolution or exacerbation of diseases.

Key characteristics of health organizations that conduct PHM include:  an organized system of care; coordination across care settings; enhanced access to primary care; centralized resource planning; continuous care, both in and outside of office visits; patient self-management education; a focus on health behavior and lifestyle changes; and the use of health information technology for data access and for communication among providers, and between providers and patients.

An effective ACO must not only take excellent care of patients who present for care, but must also try to stay in contact with people who rarely or never see healthcare providers.  And an ACO that proactively addresses the health needs of this cohort will be better able to control costs.

Role of Technology

Electronic health records (EHRs) are crucial to clinical integration and care coordination. Not only can they make it easier for caregivers to document and retrieve patient information, but they also hold the key to health information exchange with other providers.

Besides offering incentives to physicians who show “meaningful use” of qualified EHRs, the government is funding health information exchanges (HIEs) through the states, but these are still in their infancy. To achieve clinical integration, ACOs will have to form seamless electronic networks that will enable data exchange between disparate EHRs.

Tools, which can be used in conjunction with EHRs, include: electronic registries; multiple outreach and communications methods; software that can stratify a population by health status; and health risk assessment programs that trigger alerts and provide educational materials to patients.

The prevalence of disease in a patient population great because many patients are undiagnosed or have fallen off their radar screens. Moreover, many patients with known conditions are at risk of developing complications because of care gaps and/or lack of compliance.

In conclusion, the success of ACOs depends on clinical integration and population health management. To do PHM effectively, ACOs will have to turn to automation tools that not only extend the capabilities of their EHRs but also reduce the burden of routine care management work on their clinicians.

Richard Hodach, M.D., MPH, Ph.D. is Chief Medical Officer of Phytel, Inc. For more information or to contact Dr. Hodach, please visit

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