Accountable Care Organizations


Accountable Care Organizations (ACO) are a type of payment and healthcare delivery system that bases reimbursement on quality of care.  A group of healthcare providers form an ACO to provide care to a group of patients.  According to CMS an ACO is an “organization that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.”  The health reform law established a Medicare ACO as of January 2012.  However, ACO’s in one form or another have been around for some time.

In the 1970’s physicians banned together and endeavored to act as health insurers but more commonly they would contract with various payers to provide total care to a patient population.  The theory behind this was if they could control the costs associated with managing their patient population they would reap the rewards of increased profits for providing the care they would have anyway.  This was not without its pitfalls.  Patients were unhappy with the limited access to providers, as the physician organization dictated which provider could see which patients.  Also, concerns were raised that individuals were denied certain tests to contain costs.  As one can clearly see there was the potential for conflict of interest.  Yet cost containment was part of their agenda and one can agree that there is a need for cost containment in health care

The most common model and in the one largely in force today is the physician fee for service payment structure.  Here, physicians order services for patients in attempt to diagnose the disease process, if any, behind their signs and symptoms.  One could argue this incentivizes the performance of services thus resulting in payments from the insurer resulting in over utilization of resources.  Imagine this, how many patients were helped, treated, or cured as a result of this model of care?  However, when the physician is connected financially to the care of a patient it does affect the way in which he utilizes resources.  Is that altogether wrong?

Although medicine is considered a science, so much of the treatment of a patient involves trial and error.  Take for example medication management.  The physician prescribes an antihypertensive and the patient is asked to trial the medication and monitor their blood pressures at home.  After a couple weeks the medication is found to not provide enough therapeutic benefit so another antihypertensive is prescribed.  The same process is followed, this time the medication is found to provide therapeutic results.  Why does one medication provide the desired results over another similar medication?  Since each patient is an individual each medication responds individually.

Let us use the above illustration and modify it slightly.  The patient trials several medications and several dosages but none of them yield the desired therapeutic results.  So the physician orders diagnostic testing in an attempt to evaluate what the root cause behind the hypertension is.  After ultrasounds and angiograms the patient is diagnosed with renal artery stenosis, or a blockage in the artery the leads from the abdominal aorta to the kidney.  The artery is stented and the patient’s hypertension is resolved.

The goal of ACO’s is to combine the benefits of the capitation model with the physician fee for service model.  The assumption is made that these patients are already integrated into a health network of sorts by virtue of the fact that they utilize the same hospital network for services therefore their physicians are part of that same network.  The theory is that if more emphasis is placed on the primary care physician’s ability to orchestrate care it will reduce costs by possibly eliminating unnecessary services.  When these cost savings are realized there is the opportunity to reap some share of the savings, but just how that will be divided among the ACO’s providers has not been established.

The initial demonstration project began in 2005 focused primarily on Medicare; this however yielded mixed results.  The demonstration project is over, and in spite of the results is in full force with other groups implementing these models as well.  One can expect the ACO methodology to evolve over time. Only time will tell if these changes will truly result in a better physician patient relationship or again leave the provider scrambling to provide services while insurance carriers continue to ratchet down reimbursements.

University Hospitals is a local hospital that has formed an ACO to provide care to it’s employees that participate in its health plans.  By participating in is various wellness programs its members save money on their premiums.  Please see  for how just one health system is implementing the ACO model.

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Empathy In Health

In my recent hospital stay due to appendicitis, I was able to view certain aspects of “hospital life” through the eyes of a patient.  As a patient we put our trust (and our lives) into the hands of the doctors and nurses who help treat and care for us.  When I initially went to the emergency room for the pain in my abdomen, the doctor did the oh-so-horrifying test of pushing hard on my abdomen and releasing fast to see if this caused any pain. Well, since I had appendicitis, it did – and it brought a few tears to my eyes. Partly because it hurt and partly because it scared me to know that I was inevitably going to end up having surgery and having to stay in the hospital for a few days.  After the tears ran down my face, the ER doctor took my hand and said to me “I’m sorry you are in pain and I know you are scared, but everything is going to be fine and we are going to take good care of you.” While I was still hurting and still scared, knowing that this prestigious man who I’m sure had been doing this for years and has seen much worse than me and my sad little appendix, still cared enough to take my hand and make me feel safe and cared for, made me feel a little better.

stock photo : Two doctors with a patient

Fast forward to the next morning just before my surgery and my meeting with my surgeon.  The difference between these two doctors was astounding. The surgeon came in, looked at my chart, asked if I was Melinda, said “We will start shortly”, and walked away. He did not make eye contact, he did not introduce himself, he did not make me feel safe, and he did not bother to stick around and answer any questions I had. As soon as he was there, he was gone. I was about to be wheeled into surgery and I still had no idea if I was getting sliced open or if my surgery was going to be done laparoscopically.  Thanks to the nurse who was in the ER, I learned it would not be done laproscopically, but I was in fact going to be sliced opened. My next questions was why and I was told that was something I should have asked my surgeon when he came to see me. Oh, you mean that nice man who didn’t even bother to make eye contact with me? Well, I would have if he bothered to stick around for more than 30 seconds.

stock photo : Mad mental sick blood soiled surgeon with knife

Perhaps the ER doctor had more experience working with patients who were awake and not ready to go under the knife and this was the reason he was so much more caring, but if you ask me, I could have used some sympathy from my surgeon. This led me to wonder if empathy in doctors is a dying art form.  According to an article in the Chicago Tribune, many of the future doctors “begin medical school with empathy for their patients but gradually learn detachment, perhaps in order to cope with time constraints or sadness.” (

So is anything being done to encourage or educate physicians when it comes to showing empathy? In the same article in the Chicago Tribune, it is stated that “Allan Hamilton, a neurosurgeon at the University of Arizona, uses horses and horsemanship exercises to teach medical students the importance of non-verbal communication and the value of good patient-doctor relationships. Horsemanship comes into play, he said, because it requires the understanding of body language and sensitivity.”

While it has been called to attention that lack of communication and empathy on the doctors part, Dr. Hamilton seems to be a loner in striving for better doctor/patient relationships.  I think that starting now, even the most renowned surgeons should be required to attend sympathy seminars, or something of the sort. Hospitals need to set up a program that their physician and surgeons are required to participate in that shows the need for empathy on their parts. Even if it’s just once a year.

In a week I go to for a follow up to see my surgeon. Maybe then I will get all of the questions I had before my surgery answered. Maybe three weeks after I was operated on, I can feel the relief I was looking for before I went under the knife.

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Health Care Jobs: The future

SAN DIEGO (March 7, 2011) Nurse practitioner T...

For those planning to begin working in the health care field in the next few years, what is the outlook? Will there be jobs? Where exactly will the jobs be?

Yes, there will be jobs in Healthcare because the field is expected to grow in the next few years. In a news release dated February, 2012, the United States Department of Labor (USDOL) predicts that the industries with the fastest job growth between now and 2020 will be in “health care, personal care, and social assistance, and construction.”(1). The USDOL suggests that job growth will increase 14.3 percent, amounting to 20.5 million jobs (USDOL 1). Health and social assistance jobs are expected to have the most growth, 5.6 million.

Take a look at the United States Department of Labor web site and read about the projections for many different health care positions here:

There are several reasons for this projected growth, especially in health care.

1) One reason is a slower population growth, which amounts to a smaller overall labor wforce (USDOL 1). With the elderly population growing, there will be demand for more workers in health care.

To take a look at the what the future in Geriatric care looks like, here is a video called The Future of Geriatric Care by Dr. Chad Boult, M.D. of Johns Hopkins University:

2) Another reason for the projected growth in health care is that by 2020, the baby boom generation will completely be in the 55 and older category, and those left in the “prime age working group” (ages 24-54) will drop to 67 percent of the total labor force (USDOL 1). This leaves a gap to fill and creates opportunities for people to enter the health care work force.

3) Another factor in the demand for health workers is the “increased use of innovative medical technology for intensive diagnosis and treatment” ( 1). People specializing in these technologies will be in demand.

This outlook is good for those considering careers in health care. Health Care extimates there will be 4,700, 000 new health care jobs by 2014, and more workers will still be needed. ( ) is a good site to investigate for those considering entering the health field but who still need to narrow down what exactly they want to do in health care. The site provides a good chart for job projections for specific health occupations. For example, they show that clinical lab technicians and technologists positions are expected to grow by 69,000 by 2014, and growth replacement will be 150,000 (3). Registered nurses will grow by 703,000 by 2014, with a growth replacement of 1,203,000. They show may more healthcare related occupations; take a look if you are considering a career in health care.

Do you have any other good suggestions for sites to review if one is considering a career in health care?

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Alphabet Soup

A recurring theme in health care is change.  One very small facet to medicine is reporting clinical services to insurance payers.   As medical science advances so must the means of describing it and reporting it for payment.  We know that change is on the horizon for the reporting of diagnosis codes. We also know that numerous foreign nations currently have one form or another of ICD 10 in place.  What makes the United States version of ICD 10 unique however is the PCS modification.  The PCS modification is a coding system for hospital use and it describes procedures performed for inpatient only services.

There are certain surgical procedures classified by Medicare as inpatient only services.  One of the main differences between inpatient and outpatient services is the way they are reported to Medicare for payment.  Outpatient services are reported using Common Procedure Coding System or HCPCS codes, and insurance carriers reimburse those services based on a fee schedule per line item.  There are some intricacies as to how multiple services are packaged or “bundled” but for all intents and purposes these services are paid per procedure performed or service rendered.

Inpatient services however are reimbursed based upon something called a diagnosis-related group, or DRG.  DRGs lump groups of patients with similar conditions into one category.  The theory behind this is that patients with similar conditions would require similar resources to treat.  DRGs are determined by combining the patient’s signs, symptoms or diseases, services performed, age, discharge status, and any complications and co-morbidities (cc).

Think of a DRG as a debit card with set dollar amount affixed to it.  The more efficiently the hospital treats the patient, for example, coordinating discharge on a timely basis, and/or possibly limiting tests that may be of questionable diagnostic significance the more profit the hospital will realize as a result of that visit.  DRGs main purpose was to give hospitals a means by which to identify and influence its physician providers’ behaviors and perhaps modify them.  This however has not necessarily proved to be the case.

As mentioned DRGs are determined by signs, symptoms or diseases or in other words, ICD diagnosis codes, and the services rendered, ICD PCS codes.  Let us take a look at how the PCS piece of ICD looks now compared to how it will look in 2014.  Take for example something fairly common and relatively simple, a laparoscopic appendectomy.  Currently your hospital reports this service as 47.01.  With ICD 10 PCS that same procedure would look like: ODTJ4ZZ.  The reporting of laparoscopic appendectomy received quite a make over. Let us examine what each alpha numeric character refers to:

O: Section of ICD PCS. In this instance it is from the Medical/surgical section.

D: Body system, for this service it is the gastrointestinal system.

T: Root operation for appendectomy is resection.

J: Body part, here appendix.

4: Approach, in this instance it was laparoscopic.

Z: Device, there was no device implanted so the place is held with the letter Z to indicate that there was no device.

Z: Qualifier, since Z is in the 10th place there is no qualifier.

As one can see these new code sets allow for greater specificity which is precisely what governmental payers are so desirous of.  Is this necessarily a bad concept? Not at all, however it will require physician providers to document in much greater detail.  If not, services will be incorrectly reported and the result:  improper payments.

A tremendous push to educate coding professionals is underway and this is very important.  However, if the operative report that is used to affix codes does not specify the approach for example, how can the correct ICD 10 PCS code be selected?  Clearly, physicians as well need to be educated regarding proper documentation so money is not left on the table for the hospital.

The CMS website contains a wealth of information on ICD 10 PCS and the DRG methodology

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Equality in the Medical Field

In a prestigious field, such as medicine, the doctors and surgeons that help us to stay healthy have one of the highest compensated jobs in America.  But in most fields of work, males are more highly compensated for their work than females.  Is this the same for doctors as well? The answer, sadly, is yes.  According to research done by Alicia Caramenico, journalist for, male doctors receive an average of $17,000 more a year than female doctors.

Women have the same medical training and are providing the same care for their patients, so why are they being discriminated against in the form of unequal pay?  While the explanation of women earning less than men used to be that women generally went into fields of medicine that pays less such as family practice and pediatrics, ” the percentage of women entering those fields dropped from about 50 percent in 1999 to just over 30 percent in 2008, roughly on par with male doctors” (Reuters).

To me, this gap in pay is horrifying, and the fact that it is increasing is even worse.  In 1999, the average pay difference was less than $4,000 (Caramenico).  With so many advances in the medical field today, it would be nice to see some advancement in the form of equal pay and gender equality.


Caramenico, Alicia. “Female Doctors Earn Much Less Than Male Doctors.” 3 Feb. 2011. Web. 20 April 2012

“Pay Gap Between Male And Female Doctors Gets Wider And Wider”.  Huffington Post. Thomas Reuters. 3 Feb. 2011. Web. 20 April 2012

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Interdisciplinary Teams in Health Care Work

A U.S./Honduran medical team performs gall bla...For a patient receiving treatment for a serious illness, such as cancer, often there is more frustration in figuring out how to coordinate all their own care at different facilities than there is with the illness itself.

I have a friend who recently received treatment for breast cancer and needed various types of testing performed at different facilities, had different schedules for various proceedures, and many doctors, nurses, and facilities to coordinate with regularly. In addition to her cancer, she also had Irritable Bowel Syndrome and an elevated glucose level but not quite diabetes yet. Some of the cancer medications made these other problems worse. She was more frustrated with running around like crazy trying to coordinate her own care, often receiving conflicting information from different places, than she was with having cancer. She had enough stress from dealing with cancer, that the extra stress she received from the facilities she relied on for care, often nearly drove her to want to stop treatment. She experienced several melt-downs from all fo the stress.

A new concept in care that may help alleviate some of these problems for patients is interdisciplinary teams that coordinate the care and services for patients, especially for complex problems such as cancer.

According to researchers Nandiwada and Dang-Vu, “transdisciplinary health care involves reaching into the spaces between the disciplines to create positive health outcomes through collaboration” (26). They state that the team may involve doctors, nurses, social workers, physical therapists, alternative medicine doctors, and many others.

 The University of North Carolina School of Medicine shows some advantages of these interdisciplinary teams for the the health care facility, for patients, health care professionals, educators and students, and the health care delivery system as a whole at this site:

But to summarize a few of the advantages to patients, facilities, and health care providers, here are a few of the highlights.

For the patient, these interdisciplinary teams “improve care by increasing coordination of services, integrates health care for a wide variety of problems, empowers patients, uses time more efficiently” among other advantages. For my friend, having the support of a team that takes care of some of the more confusing parts of coordinating services for cancer and associated problems, this could mean much relief. She could more easily focus on taking care of herself and reduce her stress.

For the facility, the coordination of services can be cost effective and efficient. Teams of people who work together regularly and are used to working collaboratively can be effective and reduce redundancy and improve efficiency.

For health care professionals, the well coordinated interdisciplinary teams improve the satisfaction and effectiveness of the health care professionals involved, leading to a better work place and improved patient care. The University of North Carolina emphasizes that the teams “increase professional satisfaction, facilities shift in emphasis from acute, episodic care to long-term preventative care, enables the professional to learn new skills and approaches, encourages innovation, and allows providers to focus on individual areas of expertise” (University of North Carolina School of Medicine 1).

Interdisciplinary teams are growing in the health care field. Hopefully, as suggested, they mean better care for the patient, cost reduction for the health care facility, and more satisfaction and effectiveness for the health care practitioner. Do any of you have experience with interdisciplinary teams? What is your experience?

University of North Carolina School of Medicine

Nandiwanda and Dang-Vu (2010). Journal of Health Care for the Poor and Underserved 21 (2010): 26–34.

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ICD 10 – Are We There Yet?


ICD 10 CM represents the biggest change to the code set used to describe illnesses in individuals and its implementation into US healthcare has been talked about for the past 10 years.  As mentioned in a previous post The WHO maintains the ICD coding system and it in fact is in use in 110 other countries around the world.  Nations like Australia for example, have been using ICD 10 since 1998.  The US is currently using a piece of ICD 10 for is mortality reporting for the CDC but is still using ICD 9 CM for diagnosis coding.

One of the main reasons for the creation of ICD 10 CM is that over the years of ICD’s use there simply isn’t room in the current set of over 13,000 codes to sufficiently report new illness/conditions that are being submitted by various medical societies.  Another reason for ICD 10 is that it will allow for greater specificity in describing diseases and illness which in turn will allow for better epidemiology tracking.

Let us look at a couple examples:



Asthma with acute exacerbation is 493.92


mild, intermittent, w/acute exacerbation J45.21


severe, persistent w/acute exacerbation J45.51

The following is the code set for thumb laceration:


Thumb, w/o nail damage, initial encounter 883.0


Laceration w/o FB, right thumb, initial encounter S61.011A

Laceration w/o FB, left thumb, initial encounter S61.012A

One can see in both examples there is now opportunity for greater specificity.  The asthma episode can be more clearly defined and the laceration now has a left and right clarification to the location, a degree of specificity not seen in ICD 9 CM.  Also the laceration diagnosis went from four digits to seven, with an alpha character.  It is changes like these that will require professionals who use these code sets to be retrained.

Organizations like the American Academy of Professional Coders (AAPC), HcPro, OptumCoding, and Supercoder just to name a few offer ICD 10 “boot camps” where individuals can obtain training on how to properly interpret the changes in ICD 10 and be prepared its implementation.  These seminars range from $600.00 to $1,000.00 per person; yet another example of industry evolving to meet its changing needs.

Professionals across the industry have anticipated ICD 10 CM with fear and trepidation.  CMS has just announced this past week that they will delay the implementation of ICD 10 CM another year. Small practices have expressed difficulty in getting their staff trained and finding software to accommodate the impending changes with ICD 10 CM.  This marks the second time that its implementation has been delayed.  Providers have been given more time, but will it be enough?

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