On the flip side, ACOs that see costs rise above that threshold are on the hook for shared losses. When the risk of loss actually kicks in depends on an ACO's arrangement with CMS. Under one model, ACOs can avoid shared losses for their first three years in the program. But after the initial three-year term, ACOs must make the numbers work or pay the price. The urgency is greater still for ACOs pursuing the CMS alternative shared-savings model, also known as the Pioneer ACO Model: Participants can share a bigger cut of the savings, but the risk factor appears in the initial term.
IT stands to play a pivotal role as ACOs endeavor to trim costs, improve patient care and qualify for shared savings or other financial incentives. An EHR is one foundational piece of technology ACOs need-"Everybody's got to have one," Podesta says-since achieving these goals is a matter of effectively sharing clinical information.
Podesta says the EHR adoption rate among Vermont's medical practices exceeds 70 percent. The ACO will have to get paper-record participants on to some sort of EHR, perhaps a cloud-based system, he notes. In the meantime, data may be abstracted from paper medical records for ACO use.
In Texas, the Baylor Quality Alliance, an ACO owned by the Baylor Health Care System, requires participants to adopt EHRs. EHR use is widespread: More than 1,800 participating physicians use EHRs compared to 170 doctors who are holding out, notes BQA President Dr. Carl Couch.
"It's our goal that everyone have an EHR, and we will push the stragglers who don't have an EHR to get one adopted by next year," Couch says.
EHRs may be one of the easier technology hurdles for ACOs, given expanding use across the country. A study published earlier this year in the Annals of Family Medicine reported that EHR adoption doubled among family physicians between 2005 to 2011. The study pegged the 2011 adoption rate among family doctors at 68 percent, suggesting that EHR penetration could surpass 80 percent in 2013.
Challenge No. 2: HIE Implementation and EHR Interoperability
Now for the bad news: Providers have adopted a wide variety of EHR systems, creating integration challenges for ACOs. Independent physicians working with BQA, for example, use 46 different EHR systems, Couch notes. (The situation with employed physicians is more straightforward. Doctors with Baylor University Health Systems' medical group, HealthTexas Provider Network, all use a single EHR, GE Healthcare's Centricity.)
For BQA and other ACOs, a health information exchange provides one way around the problem of incompatible EHRs, serving as an intermediary among EHR systems, providing bi-directional communication. "To wire together all those EHRs, the only solution we have been able to identify right now is an HIE," Couch says.
Sign up for CIO Asia eNewsletters.