Red Hot Accountable Care

Accountable care organization (ACO) is the latest buzz phrase to hit the healthcare executive lexicon. The concept is so hot yet so poorly understood that a cartoon mocking our ignorance about it, "In Search of an Accountable Care Organization," has gone viral on YouTube.

The cartoon depicts a healthcare executive at a help desk requesting information about how to create an ACO. His board wants one; when he admits his ignorance about healthcare reform and accountable care and what this all really means, the helper tells the executive, "You really are quite clueless."

New Playing Field
After the laughter subsides, most healthcare executives experience mounting anxiety about the challenges that lie ahead. We are all feeling a bit clueless right now. As one leader described recently, "It's like we have been playing baseball for about 50 years. We learned the rules and got really good at baseball. We know how to win at this game. Now we come out onto the field, and the game is soccer."

Moving to accountability for patient outcomes and cost is going to be the new end point and it is, indeed, a big game changer. Today, hospitals win by filling beds; in the future, we will be rewarded for emptying beds of patients that will not need acute care because they are getting state-of-the-art preventative and chronic care and engaging as partners in building healthier lifestyles.

While how we win at the new game will be dramatically different than the old, we know a lot about how to be successful. We have many of the basic skills in our organizations. The task at hand is not so opaque. I would argue we know enough about what to expect and have enough expertise at our disposal to step up in this challenging environment. In fact, this is an opportunity to demonstrate genuine leadership and innovation.

Putting Things in Perspective
Here is my take on the bottom line about our situation: There is wide agreement that the current inexorable cost inflation is unsustainable. When your industry grows dramatically faster than the rest of the economy for decades, now more than 17 percent of the GDP, you have to expect things are going to change eventually. That day has come.

We know that policy makers and industry leaders, regardless of political perspective, are working hard to reshape how healthcare is financed to create vastly different incentives. Some major changes will be driven from Washington; others will come from market innovation and local initiatives. The mix is uncertain and it doesn't matter. Regardless of the blend of market and government roles in reshaping the healthcare industry, the endgame is clear: Successful physicians, hospitals, providers and systems will compete and be paid on performance.

Here, I refer to performance in the broad sense - clinical outcomes, evidence-based clinical practice, safe, timely and efficient care - the IOM Six Aims we've been hearing about for a decade. While we can't say for certain how the details will line up, we can assume that money will follow measured performance, not volume, as well as quality efficient care, not piece work.

Of course this will all take time. President Obama has said he hopes he'll be the last president to have to talk about healthcare reform ... and that seems pretty unlikely. These changes are big. Progress may yet seem slow and undoubtedly the whole thing will be, at times, messy and painful. There will be new challenges like managing the power of increasingly integrated markets and dominant players. But the path is clear enough for healthcare executives to set direction for our teams, our workforce, physicians and stakeholders.

Quality: Once Optional, Now Imperative
So what are healthcare executives supposed to do? After you set up a legal structure for an ACO and its board has a few meetings, what next? The good news is that we know directionally where to focus. Much of the expertise and skill to create what must be created exists today, and much of it within our organizations. It just needs the full attention of senior leadership.

This means performance measurement and improvement has to move center stage on our calendars and within our organizations. It's no longer a "nice to do;" it's a business imperative. Organizations that thrive in the future environment will have the infrastructure and capabilities to:

• build clinical integration to coordinate patient care services across people, functions, activities and sites over time;
• support use of evidence-based systematic care processes;
• identify and efficiently measure the performance of key processes;
• recognize how performance compares to other organizations and identify the gaps; and
• improve processes to achieve competitive performance across multiple dimensions - most importantly, patient safety and outcomes.

Most organizations have people on the team with these skills; what they lack is the attention of senior leaders to their task. They need a new playbook and regular coaching from the top. They may need more skills and you may need to acquire some new players.

While public and private policy makers redesign dysfunctional incentives to ensure our economic focus is on the health of populations and individuals, we need to build our infrastructure and approaches to managing our care delivery and support processes. Performance excellence - safety, quality, efficiency and customer experience - is now a business imperative.

Become Process Literate
The foundation for being able to measure and manage these characteristics of our services is that we know what our key processes are, efficiently measure them and prepare leaders to take action when performance falls short. Anything less and we waste a lot of time with eye glazing score cards without really improving the performance of our organizations.

We need to put our executive heads into this aspect of the new game. By investing our time on the performance management functions, updating these capabilities and putting our attention onto these responsibilities and our people in these functions, we can win at the new game. Organizations that step up and deliver will be rewarded.

Dr. Kate Goonan is executive director of the Massachusetts General Hospital Center for Performance Excellence (CPE), Mongan Institute for Health Policy, Massachusetts General Hospital/Partners. CPE is a consulting resource for healthcare senior leaders (www.mghcpe.org).  Dr. Goonan also is co-chair of the ASQ Healthcare Division's Voice of Customer Committee.

The content for the Eye on Quality is contributed by ASQ (American Society for Quality) as part of a  partnership with Advance. For more information on ASQ activities, educational offerings and/or membership, visit the ASQ website at www.asq.org/healthcare or call ASQ at 800-248-1946.