ACOs are Caught in the Web of Value Based Care and Fair Reimbursements

The Black Book estimates that healthcare expenditures may reach $3 trillion within the upcoming 5 years. Consequently, Accountable Care Organizations (ACOs) are reprioritizing their financial objectives. According to Black Book, 95% of 200 ACO-based health plan executives are making financials a top priority. However, 19% of working ACOs believe the successful installation of financial technology, outsourced services, and consulting will be the drivers of long-term success.

Value-based payment contracts are new to the industry, and providers do not yet have the IT capabilities. According to Doug Brown, President of Black Book Market, 40% of large hospital and physician organizations use population health solutions, but only 14% have acquired ACO risk management, analysis and provider payment incentive tools.

Newly formed ACOs claim that their biggest issue is working with budgets that are too restrictive to stimulate financial operations and technologies for value-based care. 85% of all hospital CFOs and 81% of ACO executives agree that without a strong financial solutions vendor, they will be forced to avoid important risk-based contract opportunities through 2016. Currently, 12% of healthcare payments are made through value-based programs, and Black Book estimates this to increase to more than 50% by the end of 2019.

Written by Caroline Smith

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Caroline Smith is currently a senior at the University of Notre Dame and is a contributor to Medical Groups. She is majoring in Science-Business and Spanish. After graduation, Caroline plans on entering the field of healthcare consulting. She is most interested in the evolving policy changes in the healthcare industry and enjoys learning about new technologies that are being developed.