This post is the fifth of an 11-part series that proposes structures and actions that characterize successful accountable care organizations. Click here to download A Model for Value-Based Provider/Payer Partnerships white paper that covers the subject more in-depth.

It is important for accountable care partners to understand their financial, clinical and quality performance on a macro level and on a micro level—a macro level to see overall progress toward goals and a micro level for specific populations and for specific interventions. Monthly macro and micro financial, clinical and quality metrics offer the organizations a current-state view, allowing them to see the impact of their interventions and the opportunity to realign strategies and priorities. Metrics should help the leadership teams understand utilization, costs, patient satisfaction, evidence-based care adherence, trends and outcomes.

As the partners come together, the executive team, in conjunction with physician and operational leadership, defines the clinical benchmarks and performance goals early. These benchmarks and goals become a road map for creating value for participants in the ACO, can help identify the areas of opportunity to improve patient and population health, and can subsequently define industry-accepted targets that make sense for their organization.

Performance metrics must be transparent to all levels of the organization to encourage integrated accountability and ownership of change. The metrics should be shared on a monthly, quarterly and yearly basis and compared to the previous month’s and previous year’s performance. The goals of the metrics should be to:

• Define the per-member-per-month (PMPM) savings on a macro and micro level
• Illustrate physician performance and variation to drive change
• Measure hospital utilization and costs
• Identify in-network and out-of-network utilization and PMPM
• Measure adherence to evidenced-based protocols
• Measure patient satisfaction with care delivery, programs and physicians
• Validate that the implemented interventions had a positive impact on clinical outcomes
• Understand trend deflections on a macro and micro level
• Measure quality improvements of targeted programs

Executive leaders must not just compare the organization to other non-ACO groups but also benchmark performance using industry-accepted benchmarks that have been agreed to by all parties. This will allow the team to identify inpatient, outpatient, professional and pharmacy utilization and cost outliers.

As outliers are evaluated, a root-cause analysis should identify specific interventions for improving results. The root-cause analysis should evaluate opportunities, including physician variation, alterative care settings, evidence-based adherence, population health management failures and out-of-network opportunities to reduce inappropriate utilization—ultimately reducing costs.

The next post in this ACO models series discusses how care integration requires re-thinking care delivery.

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