Premier Financial Tool to Aid ACO Transitioning

Experts from 28 health systems have developed a financial modeling tool to assess the economic impact associated with a system-wide transition to accountable care.

Premier healthcare alliance Accountable Care Implementation Collaborative members will leverage the model as a decision support tool to assess financial risks and opportunities for their physician networks and hospitals in the movement toward accountable care. Additionally, organizations can evaluate various scenarios to determine how quickly to transition to an accountable care organization (ACO), which populations should be targeted for ACO services and how to structure shared savings arrangements with payers.

The ACO financial model can help organizations plan budgets, investments and other financial needs as they transition over time from today’s fee-for-service reimbursement system to one based on shared savings and value-based payments. Specifically, the model is composed of more than 150 different financial analysis “levers” that evaluate the impact of accountable care on health system financial performance. Users of the model can:

• Estimate the ACO’s impact on future volume and revenue by assigning various combinations of beneficiaries to the ACO by major payer category (i.e., Medicare, Medicaid, commercial, etc.).
• Model the financial impact of a variety of shared savings arrangements, ranging from fee-for-service plus potential shared savings incentives to full-risk capitation. Users also can examine different shared savings distribution models between providers and payers.
• Evaluate the impact of services provided in sites that are in-network versus out of network.
• Model total medical costs per member, per month by major service and payer.
• Assess changes to utilization patterns that may occur as systems transition to accountable care, such as increased primary care and decreased hospital inpatient services.
• Alter labor cost drivers and designate staff to specific ACO support functions during the transition to accountable care.

Using the accountable care financial model, users can project summary income statements for the healthcare delivery system, hospitals, the physician network and the ACO entity. Levers can be adjusted to model ACO growth, use rate changes, medical costs, staffing shifts, and population and other market changes over time.

The ACO financial model is the latest deliverable provided to members of the Accountable Care Implementation Collaborative. Already released is an industry standard information management capability road map for enabling accountable care. Additional tools and offerings to help members transition to an ACO model will be released over time.

The collaborative currently includes 28 health systems with more than 120 hospitals and 5,000 physicians across 23 states. Upon launch, these providers will provide health and wellness services for 1.5 million beneficiaries.