Things to Consider When Creating a Compensation Package for ACO Positions
An ACO (Accountable Care Organization) is a network or a group of doctors and hospitals that share medical and financial duties to provide coordinated and well-managed care to patients while preventing redundant expenditure. At the core of each ACO team lies every patient’s first point of contact; their primary care physician.
Around 23.5 million Americans are being served by an ACO, with just around 6 million medicare beneficiaries and more than 744 private medical organizations serving them. Chances are you are already in an ACO without realizing that you are.
An Accountable Care Organization brings different parts of healthcare together to take care of the patient. Rather than getting each part of the health care separately, ACO’s enable patients to get all the services without having to move from one medical service provider to another. The president and CEO of the Center for Healthcare Quality and Payment Reform in Pittsburgh, Pa, Harold Miller compares an ACO with a television company. He says, “Medical services are quite similar to buying a TV. It would be better for the consumer to buy a television, instead of buying all the parts of it from different sources and then putting it together themselves.”
ACO Payment Procedure
In the traditional fee-for-service model of medical care services, doctors and hospitals get paid for each test and medical procedure they conduct on and for a patient. This means the more they work on a patient, the more they get paid. This is where the loophole works in favor of the service provider. They may conduct more tests and use procedures that are not even needed, for the sole purpose of minting more money from patient’s pocket.
ACOs, on the other hand, are given a bonus when they keep the medicare costs down. There are specific quality benchmarks that doctor and hospitals need to meet. The primary focus is on preventing and curing chronic diseases and managing these patients carefully.
In simple words, ACOs are paid more when they keep their patients healthy, and out of the hospital.
Points to Consider While Creating Compensation Package
The basic idea of forming ACOs was to let patients get better medical services without worrying too much about the cost incurred. This is where the tradition fee for service model seems to be beneficial to many hospitals. Please remember that participating in ACOs is voluntary.
Now, when a medical service provider chooses to participate in ACO, as we mentioned earlier, they need to meet some quality benchmarks. They are offering you great medical services, trying to make you healthy and live a normal, out of the hospital life. Compensation packages for ACOs are based on the following criteria:
- The first point to consider is to understand the significance of carefully analyzing the possible impact of an ACO payment procedure on your patients.
- The second point to consider is that payment procedures for both the employed and non-employed staff must align with the performance metrics and the benchmarks that are set for the ACO to achieve.
- Next food for thought is which payment method you want to follow. You can choose any of the five payment structures: straight salary, equal shares, productivity-based compensation, incentive-based compensation, and capitation.
A good compensation package should establish equilibrium between the job done and the worth of it. Neither should you feel as if you are overpaying for the services, nor should the ACO candidate feel they are being underpaid for all their efforts. Compensation and bonuses have a direct effect on staff’s performance and productivity. Essentially, you want to build a compensation package that makes them proud of their work and also give job satisfaction at the end of the day.