Unknown by many, reforming healthcare delivery isn’t the primary function of the Affordable Care Act; it largely focuses on insurance reform. Improving service delivery, however, is critically important to the larger goal of providing universal, high-quality care that everyone can afford.

Essentia Health in February became one of six providers nationwide to become accredited as an Accountable Care Organization (ACO). The designation signifies Essentia employs best practice standards such as coordinating care among doctors, clinics and hospitals.

“The United States faces a healthcare crisis that won’t be solved by throwing more money at it. This adversity is really forcing us to innovate. I really think we are going to get to a better place…and deliver better value,” said Essentia Chief Operating Officer John Smylie. The ACO process is “a blueprint for quality using evidence-based practices,” he said.

It’s also a process that works best for large-scale integrated healthcare systems. A key element is sharing electronic medical records throughout the system.

“We’re on one medical health record, and that’s a very powerful tool,” Smylie said. Essentia began the process in 2001 and updated the process considerably during the past three years. It’s a costly endeavor, especially for smaller, independent providers.

“It would be very challenging to become an ACO without electronic medical records. We benefited greatly because we’re all on the same team,” he said. “It would be challenging for rural independent hospitals to use this model.”

That could prompt more rural providers to pursue allegiances with larger systems or become part of them.

“We are seeing increasing consolidation in the industry. Installing electronic records is not easy or inexpensive. You’ll continue to see more consolidations or collaborations,” Smylie predicted.

While the Affordable Care Act will reduced the amount of uncompensated care that hospitals provide, it likely will increase the number of patients on Medicaid and Medicare, which do not reimburse at the level of cost.

“We’re always advocating for higher reimbursement rates, but given today’s governmental budgets, the prospects are pretty bleak. We’ll just have to constantly evaluate how to drive down inefficiencies,” Smylie said.

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