This article was originally published in Health Management Technology on October 12, 2016.  

All of us in healthcare share a similar fantasy: one in which babies, children, adults and the very elderly – regardless of their needs and health status – all get the right care at the right time in the right place and at the right cost. Healthcare in its current form is far from that ideal. But with the advancement of powerful information technology, we now have what we need to accomplish this laudable goal.

Here are three steps future ACOs should take to stay strong in a value-based environment.

Step one: Identify what ACOs need

The ACO of the future needs more, including more meaningful quality measures. Most contracts – and certainly all global payment contracts – include measures of quality that physicians and hospitals must meet. These measures, such as childhood vaccinations, cancer screenings, compliance with chronic medications and patient satisfaction, are usually reasonable, but even in aggregate they only reflect a sliver of the totality of care that is taking place 24 hours a day, 365 days per year. The ACO of the future requires that doctors and other providers work collaboratively to figure out which measures are fair and meaningful, and then channel them through the federal quality data set so we are all on a level playing field.

To do this and succeed as an ACO today, organizations require sophisticated and high-quality IT to accurately and fairly gather, aggregate and analyze quality data so it offers useful feedback to providers to help them improve processes of care. With better processes in place, patients can receive high-quality care in the appropriate settings – and today’s ACOs will succeed and prosper to become ACOs of the future.

Step two: Tackle utilization

We have a colossal problem in the United States with both over- and underutilization of healthcare services. On one hand, more than 30 million people have no insurance and many more are underinsured. As a consequence, these people receive little to no coordinated care. Their disjointed care often takes place in emergency departments, and occurs after undiagnosed illnesses have taken a toll.

On the other hand, patients with insurance often receive more care than they should. This is driven by “supply side demand,” which means that doctors, in a fee-for-service environment, do procedures and offer treatments that are often not needed, and can even be harmful. The problem of overutilization is also driven by the “demand side,” which means that patients ask for treatments and drugs that they may not need, such as an MRI for a minor headache or backache, or a drug advertised on television that is not really indicated.

Fortunately, powerful IT allows us to understand the variation in utilization against some agreed-upon benchmarks. Driven by the economics of fee for value or global payment systems, the ACOs of the present are making progress in right-sizing utilization for many processes of care. At the beginning of life, IT helps demonstrate and start to address the wide variation in C-section rates. At the other end of life, IT allows ACOs to identify patients likely to die in the following six to 12 months to make certain these vulnerable patients are offered high-quality palliative and hospice care, in an attempt to avoid unnecessary and undignified hospital and ICU stays. Across the entire age spectrum, good work is being done to address variation in rates of care for all manner of procedures and treatments. This represents a huge step forward in addressing the alarming problems of both under- and overutilization.

Step three: Leverage powerful IT

The ACO of the present and to a larger extent, the ACO of the future, will employ ever better IT-driven risk stratification algorithms and strategies to identify and treat patients with chronic diseases, such as diabetes, chronic kidney disease, chronic obstructive pulmonary disease, and heart failure to name a few. IT will drive disease management registries and programs, combined with a team approach in the office, to ensure patients get the right care in the right place at the right time.

I believe the ACO of the future will see fewer patients in hospital beds, and more care rendered in the ambulatory setting, in institutional settings and at home. I believe we will see more team-based care, and more involvement of the patient in self-care, fueled by powerful IT. Patients and providers together should continue to demand and work toward better systems of care – at a better price. In the future, we will all benefit.


Dr. Rich Parker - Arcadia's Chief Medical Officer

Dr. Richard Parker

Dr. Parker serves as chief medical officer for Arcadia with overall responsibility for the design and implementation of clinical strategies, input into the roadmap and development of Arcadia’s technology and service programs, thought leadership in support of providers transitioning to value-based care, and strategic advisory work for physician leaders at Arcadia’s clients.

Previously, Dr. Parker was an internist with a 30-year history at Beth Israel Deaconess Medical Center. From 2001 until 2015, Dr. Parker served as the medical director and chief medical officer for the 2,200 doctor Beth Israel Deaconess Care Organization. He oversaw the physician network evolve from a fee-for-service payment system to a nationally recognized global payment pioneer Accountable Care Organization. Dr. Parker’s other areas of expertise include end of life care, medical malpractice, care of the mentally ill, electronic medical records, and population health management. Dr. Parker served as assistant professor of medicine at Harvard Medical School. Dr. Parker graduated from Harvard College in 1978, and the Dartmouth-Brown Program in Medicine in 1985.

Dr. Parker is an in-demand speaker to associations, companies, and academic institutions on the topics of population health management, electronic health records, value-based care, and evolutionary, medical and business impacts of stress.

October 12, 2016

How to Manage Pharmacy Costs in an ACO

Pharmacy costs are rising quickly – $297 billion in 2014 – and ACOs must take steps to contain costs.  Arcadia chief medical officer Rich Parker, MD explains why costs are rising and lays out a plan for managing them in his recent blog article.

Read the article