Todd Zigrang Discusses ACOs and the Shift Toward Value-Based Health Care

Todd A. Zigrang, MBA, MHA, FACHE, CVA, ASA, ABV, president of Health Capital Consultants, discusses accountable care organizations (ACOs) and the move toward value-based care models.

Transcript

How do ACOs fit into the overall shift to value-based care?

Value-based care encompasses a broad variety of payment options and models in which health care providers are incentivized to provide better care at lower costs. So ACOs are just one of many different models that fit into value-based care.

We have the providers such as physician groups, hospitals, other outpatient facilities—they take responsibility for the costs, quality, and most importantly, care coordination of its patients. ACOs were created, in a way, to push the industry away from fee-for-service medicine towards value-based care. So I think when we think about ACOs, that's probably the first stepping stone we saw with the Affordable Care Act towards value-based care.

Technically, when I think of value-based care and value, it's quality over cost, that equation. So everything I do in valuation—which is why I'm speaking at the conference: to talk about the valuation in the appraisal of ACOs—I think of some kind of mathematical equation. So ACOs, models, they don't have a universal definition of value, which kind of makes it challenging for ACOs, to continue generating success, if the target by which they're measured constantly moves from year to year.

But those of us in the industry, we kind of recognize that ACOs are a step along a path towards value-based care. I don't think that they'll be the end-all destination. That destination is years and years away, as we've seen how long it's taken to get to this point. I've been in health care for almost 30 years now, and I recall the Clinton administration moving into health care reform. And here we are, still talking about, they're still trying to get there.