Building an ACO: A Dispatch from the Front Line

By Scott Harris

The concept of the Accountable Care Organization (ACO) is so simple. But that simplicity stops, like a dog at the end of its leash, in the concept phase.

A handful of academic medical centers nevertheless chose to surge forward with plans to create an ACO, which aims to reduce costs and improve outcomes by tying higher reimbursements to better care. Now, one of those centers is reporting back from the front.

Leaders in the effort to turn Robert Wood Johnson Medical School, now part of the University of Medicine and Dentistry of New Jersey (UMDNJ), into an ACO published a progress report in the November issue of the journal Health Affairs.

The Gordian knot that must be unraveled and reassembled in order for an ACO to work is almost disorienting. But Alfred F. Talia, MD, MPH, who is leading the effort at Robert Wood Johnson, said the biggest tangle resided not in the technical blueprint but in long-entrenched professional mores.

“The challenge is always, How do you change human behaviors, which have been in place for a pretty good reason, like rewards?” Talia said. “This ain’t easy, and it is very complex. I’ve been called insane for even trying it.”

The effort, which began three years ago and is expected to start some time next year, aims to accomplish several things at once, all of which seem reasonable enough on paper. Probably recognizing that relying on a single payment method is likely what helped create much of the cost problem in the first place—particularly in a sector as complex as academic medical centers—Robert Wood Johnson’s ACO model provides a range of compensation methods including monthly per-patient care management fees for providers (adjusted for the complexity of each patient’s illness) and a shared savings approach rewarding better population health. The traditional fee-for-service structure remains intact as a way to encourage access in primary care settings. To help address New Jersey’s primary care provider shortage, the ACO plans to employ primary care providers and offer management services to affiliated practices.

The real salesmanship comes into play, Talia said, when it’s time to discuss ways to put the concept into motion.

“It’s easy to get buy-in,” Talia said. “The hard part is managing the human behavior around it. You’re talking about changes in funds flow. You’re talking about changes in power structures and getting people out of their silos.”

Talia estimates he and his team have spoken individually with 1,000 different people and entities, hashing and rehashing the various costs and benefits for each and every stakeholder.

“We spent a lot of time reinforcing to people that they were going to be fine financially, and their reward needs were going to be met,” Talia said. “Their capacity to continue functions like education and research were not just maintained but enhanced by this model. We’d get the data about what the needs were out there and then go back to them and try to illustrate that this is a way not just for them to do fine but to achieve the center’s objectives.”