Case study

CASE STUDY: Forming an Accountable Care Organization

You manage the Rehabilitation Unit of a 300-bed community hospital affiliated through a large scale merger with three other local community hospitals. You have been informed that the Board of Directors of your hospital system is considering an offer from CMS (Center for Medicare and Medicaid Services) to become an Accountable Care Organization (ACO).  There are two distinct options for becoming an ACO on the table. One is to partner with the local Quality-Driven Insurance Company (QDIC) on an ACO venture. The other is for the health system to become a hospital-based ACO on its own.

All unit managers from all four hospitals have been directed to write a 2-3 page memorandum. The information contained in all memoranda will be synthesized into a comprehensive document for review at the next Board of Directors Meeting. Your memorandum must respond to the following questions:

• What is an ACO?  Give a brief overview of what it includes and how it impacts reimbursement.

• As department head, do you support your hospital system converting to an ACO? Why or why not?

• Do you believe that the hospitals and all of your Medicare patients will be best served through forming your own ACO or partnering with the insurance company in their ACO? Please explain your response.

• What benefits do you believe will result from becoming an ACO for your unit, your hospital, your patients, and the community as a whole?  What problems or challenges do you foresee in becoming an ACO for these stakeholders? How about for the hospital’s relationship with other insurers/payers?

• What changes or innovations would you want or expect to see in the way health care is delivered in your community as a result of the new financial incentives?