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Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Clinical laboratory managers and pathologists can expect ACOs to impact competition for laboratory services

Six accountable care organizations (ACO) stepped up and applied for accreditation through the National Committee for Quality Assurance (NCQA). In many ways, this marks the beginning of the ACO era in American healthcare.

These six intrepid first-mover organizations will be familiar to most pathologists and clinical laboratory managers. In a recent press release, the NCQA announced their names. They are:

NCQA designated these six ACOs as early-adopters. It also stated that these organizations are prepared to let their outcomes metrics speak for themselves. Each has committed to undergoing a full NCQA survey of their ACO capabilities between March 1 and December 31, 2012, the press release stated.

ACO Leaders Demonstrate a Pioneering Attitude

Associated with the NCQA’s announcement was the usual praise for the vision and foresight of these provider organizations. “I applaud these organizations for having the courage to go first and measure themselves against objective, balanced standards of ACO readiness,” praised NCQA President Margaret E. O’Kane in the NCQA press release. “Volunteering for this evaluation is the first step to showing payers and providers how well they can do the things ACOs are expected to do.”

As of the September 2011, Leavitt Partners has identified 164 self-proclaimed ACOs across 41 states.

As of the September 2011, Leavitt Partners has identified 164 self-proclaimed ACOs across 41 states. (photo by

According to NCQA, ACOs are generally defined as provider-based entities that aim to improve the quality of health care and reduce cost growth for a group of people. In order to have enough patients for quality reporting and managing financial risk, ACOs must serve at least 5,000 patients. The triple aim of ACOs, the accreditor said, is: 1) to reduce cost; 2) to improve quality; and, 3) enhance the patient experience.

Concerns about Competition May Drive Hospitals toward ACO Model

Separately, and of interest to clinical laboratory managers and pathologists, is an ongoing study on the growth and dispersion of ACOs. The study is being conducted by Leavitt Partners of Salt Lake City, UT.

As of September 2011, Leavitt Partners has identified 164 self-proclaimed ACOs. It says that sponsoring entities of these ACOs include hospital systems, physician groups, and insurers. These ACOS have a market presence in 41 states.

“A clear movement is evolving within the health care industry towards the accountable care model of providing health services,” stated Andrew A. Croshaw, Managing Director of Leavitt’s health practice and a study author.

Medical laboratory professionals will be interested to know the composition of these 164 ACOs. About 60% are primarily sponsored by hospital systems. Another 23% of ACOS are sponsored by physician groups, and insurers sponsored 17% of the active ACOs.

Managed Healthcare Executive published a story and found that data indicates that competing health systems are creating ACOs.

The Leavitt Partners’ ACO study suggests that competition among ACOs in a region is already occurring. “As one team forms in a given hospital referral region, it seems to be spawning additional teams that don’t want to be left out of the game,” Croshaw observed. “That integration of care offers additional negotiating leverage, even if the ACO movement stumbles.”

With Leavitt Partners able to identify 164 self-proclaimed accountable care organizations, it appears that the era of ACOs has begun. The question that is uppermost in the minds of most clinical laboratory administrators and executives is simple: “How will ACOs change the way physicians order clinical laboratory tests and then use the lab test results to improve patient outcomes?”

Because this is the first year that accountable care organizations can contract with the Centers for Medicare and Medicaid Services (CMS), the true impact of this care delivery model on healthcare won’t be known for several more years. However, as more office-based physicians become affiliated with an ACO, either because of acquisition by the ACO’s hospital/health system, or by contract, it is likely that these physicians will be directed to use a single clinical laboratory provider. If this proves to be true in many communities, it will significantly alter the competitive market for medical lab testing services that exists today.

—Pamela Scherer McLeod

Related Information:

Early Adopters Are First To Seek ACO Accreditation From NCQA 

Growth and Dispersion of Accountable Care Organizations

NCQA Accreditation Provides Roadmap To Accountable Care

Hospital systems more likely to act as ACO champions

More study needed to further narrow the working definition

THE DARK REPORT Laboratory Intelligence: ACO Recent Coverage