Blog Post

Choosing the Right Care Transformation Model

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As the transformation of our healthcare delivery system continues to accelerate, providers are constantly being asked to evaluate new care models for relevance to their organizations. It’s no easy feat – the menu of next-generation delivery models is always expanding, and they tend to include complementary, reinforcing, and frequently overlapping characteristics.

When it comes to adopting a care transformation model, the stakes are high. Board members, senior executives, and physician leaders run the risk of investing substantial financial, political, and emotional capital on care transformation initiatives that, however well intentioned, might not be the best fit for their organizations.

Avoiding that risk begins with developing a shared vocabulary for some of the most commonly known – and frequently misunderstood – models of delivery system transformation. With that in mind, this blog post offers an overview of four value-based care models every healthcare executive should know.

Accountable Care Organization

An accountable care organization (ACO) is any healthcare organization that assumes financial accountability for the overall value, in terms of cost and quality, of care delivered to its patients. The model differs from other models in that it’s characterized more by the way it’s reimbursed than by its organizational or operational structure. To be considered an ACO, healthcare organizations must engage in some sort of shared savings arrangement or put a significant portion of their overall reimbursement at risk through pay-for-performance, bundled payment, global payment, or capitated reimbursement arrangements.

Clinically Integrated Network

If the most notable characteristic of ACOs is the way they’re reimbursed, clinically integrated networks (CINs) are defined primarily by the manner in which care is provided within the clinical delivery system. A CIN is any group of providers that has effectively coordinated the clinical services furnished to their patients across the care continuum.

Unlike ACOs, CINs may or may not be held directly accountable to patients or payers for the cost and quality of care they provide. But they are held indirectly accountable for their performance in that they must establish a business case that will appeal to healthcare consumers and comply with a regulatory requirement to increase the level of value-based competition in their relevant market.

Patient-Centered Medical Home

The patient-centered medical home (PCMH) emphasizes the critical role of a single, patient-selected physician who quarterbacks a practice-based care team that is ultimately responsible for planning, delivering, coordinating, and monitoring patient care – both within the physician’s practice and across the continuum. It focuses on understanding the comprehensive healthcare needs of each patient, involving patients in care plan development, and engaging them in the management of their own health. The PCMH has become a popular means for providing willing physicians with a structure and resources to improve patient outcomes and address inefficiencies that may result from a highly fragmented healthcare system.

Population Health Service Organization

A population health services organization (PHSO) is any organization that provides the resources and programs to deliver rule-based care to effectively and efficiently manage the health of patient populations. It is similar to the PCMH in that both aim to identify and optimize care for patients. That being said, PCMHs provide practice-based, patient-centric care to all patients attributed to a designated provider. In contrast, PHSOs tend to utilize nonphysician personnel housed in a centralized structure to address the healthcare needs of prioritized patient populations – high-risk and high-cost patients, high utilizers, patients with one or more chronic condition – between face-to-face visits. Supplementing a PCMH model with a more scalable PHSO is becoming increasingly common among hospitals and health systems.

To learn more about how these models have evolved, where they overlap, and how they can put an organization on the path to value-based care, download your copy of Four Value-Based Care Models Every Healthcare Executive Should Know.