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Life Health > Long-Term Care Planning

Medicare update: ACOs to coordinate care

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As part of the new health care law, Medicare beneficiaries may soon benefit from better coordination of care across different health care settings, such as doctor’s offices, hospitals and long-term care facilities. It is hoped that better coordination will not only reduce waste from test duplication but also result in better outcomes for patients.

Beginning in January 2012, doctors’ offices and hospitals that see at least 5,000 Medicare beneficiaries and reach certain health care quality goals will be rewarded with 60 percent of the savings generated, that is, if recently proposed regulations are approved.

“It is probably the most important quality challenge facing the Medicare program: fragmented and uncoordinated care,” said Elliott Fisher, a director at the Dartmouth Institute for Health Policy and Clinical Practice in an interview with “Any one of us caring for an elderly relative knows how hard it is to keep track of information. You show up in the medical office and they have no information about your mother or father.”

Doctors and hospitals will be permitted to join “accountable care organizations” to reap the benefit of saving Medicare money. By signing up for one model, they will be able to recoup savings only for the first two years. Otherwise, they can sign up for what will eventually become the universal model, in which they share in both gains and losses. According to the Department of Health & Human Services, the program could generate savings of $960 million over three years.

To earn their share of the savings, ACOs will need to meet five quality standards: patient and caregiver experience, coordination of care, patient safety, preventive care and geriatric care. Doctors and hospitals choosing to participate in ACOs must inform their patients, who may opt out of sharing their health care information. This, however, would defeat one of the main purposes of the ACOs: better coordination of care.

Health care providers who join ACOs will have a greater incentive to follow up with patients and ensure that they are educated about their own care. These organizations will change the existing model of care on which Medicare is based, which rewards a high volume of services, to one that rewards providers for delivering good health care value for the dollar.


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