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Second Essential Questions Survey Challenges ACO Assumptions

ACOs, or Accountable Care Organizations, represent a non-market innovation in healthcare delivery and have been touted as an improvement in efficiency and patient care quality. But the most recent survey conducted by Qessential Medical shows severe doubts among hospital executives about what we should expect from ACOs and concerns about how they will impact hospital performance.


Hospitals are joining ACOs in large numbers, with larger hospitals (over 300 beds) leading the way. Twenty-six percent of larger hospitals are already part of an ACO and 38% more expect to join one in the next 12 months. Healthcare experts are hoping that this new delivery model will lower costs, increase the focus on evidence-based medicine, and enhance communication among physicians in coordinating patient care. This would mean a better experience for the patient and increased patient satisfaction.


Qessential Medical conducted its second Quarterly Trends Survey this Fall and the results challenge much of the accepted wisdom about ACOs. The Trends Survey collected 516 responses from hospital executives and managers representing what are called Economic Customers in healthcare. These respondents included C-level executives, directors, and managers of acute-care facilities of all sizes.


Perhaps most importantly, from the executive’s viewpoint, the economic impact of ACOs is not expected to be helpful. Seventy percent of respondents do not see the shared savings model of ACOs as a financial gain for their hospital. And 73% do not expect the ACO approach to incentivize physicians to curb healthcare costs. The vast majority (82%) do not believe that ACOs will have a positive impact on their census. Furthermore, over 3 times as many expect a decrease in revenue vs. an increase in revenue (45% vs. 14%) as a result of the ACO model.


As a result, 59% say that providing newer medications, procedures, and devices will become more difficult in the next year compared with only 4% who believe that this will get easier. This suggests that innovative energies will be focused on cost cutting, operational efficiency, and compliance with an ever-expanding regulatory and documentation burden. But what about the quality of patient care? How will that fair in this new ACO environment? It is hoped that the shared cost model will motivate providers to work together to keep patients well, reduce duplication in testing and communicate more effectively about an individual’s case. Hospital executives are not sure.


Overall, 71% do not expect an improvement in the quality of patient care from the ACO model. This belief is felt more strongly in smaller hospitals (less than 100 beds) than larger ones. And 68% do not agree that ACOs will enhance communication among members of the patient’s care team. 63% disagree that ACOs will strengthen the use of evidence-based medicine through the use of disease management protocols and clinical decision support. The impact of all this is that 77% do not expect ACOs to increase patient engagement or satisfaction with their care.


It is certainly possible that hospital executives are being overly pessimistic. After all, change is difficult and organizational change can be wrenching. If we are to expect cost savings, we should expect to see revenues to hospitals, procedure volumes, and admissions going down. However, over the next year, about twice as many executives expect admissions to go up as down. If this is true, the battle cry for hospitals will be, “Do more with less!” and this transition could prove challenging, not just for hospitals, but for patients and physicians as well.


Results are based on an online survey conducted by Qessential Medical Market Research in August 2013. A total of 516 hospital executives and administrators, including CEOs, CFOs, CMOs, Senior Vice Presidents, Vice Presidents, and Directors, responded and serve as the basis for this article.


About Qessential
Qessential Medical Market Research is a leading full-service research provider dedicated to the pharmaceutical and medical device industries. We provide turnkey solutions in qualitative and quantitative studies as well as support services that include the most successful non-panel recruiting service for healthcare professionals in the market today. In addition, we offer exceptional analytical services to uncover hidden insights in data to create actionable market intelligence.
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