On March 26, 2010 President Barack Obama signed Public Law 111-148 the Patient Protection and Affordable Care Act [PPACA] into law. One of the elements within the PPACA is Section 3022 which is the Medicare Shared Savings Program and specifically Accountable Care Organizations [ACO]. An ACO is an emerging health care reform model defined as an entity that is clinically and fiscally accountable for the entire continuum of care that patients may need. Eligible providers, hospitals, and suppliers may participate in the Shared Savings Program by creating or participating in an Accountable Care Organization (ACO). An ACO has two primary responsibilities. The first responsibility is to continuously improve the value of the care delivered to the patients. Value is defined as quality, outcomes of care, and patient satisfaction. The second responsibility is to provide data that document the value achieved for purposed of external accountability. Case Study New Jersey Orthopedic Hospital [NJOH] in Anytown, New Jersey is a 300 bed community teaching hospital that has provided high level orthopedic and rehabilitation care for many years. In order to qualify as an ACO, the NJOH must link the hospital, its primary care physicians, orthopedic and rehabilitation specialists and suppliers together using a new bundled payment methodology. At the inception of planning for the ACO, there were a number of groups: the NJOH’s governing body [the board of trustees], the executive management, two competing orthopedic surgery groups and single specialty groups covering other areas such as anesthesiology and rehabilitation medicine. Background Historically, these groups each faced a different set of incentives and constraints. The hospital board of trustees must accept accountability, strive to balance stakeholder interests, and with limited time, focus their attention on changing conditions, to formulate policy, and establish a structure to assure oversight while maintaining their creativity. Hospitals and physicians are products of two very different institutionalized cultures, involving bureaucracy in the case of hospitals and professional autonomy in the case of physicians. The institutional cultural divide between hospitals and physicians can be summed up by noting that from the hospital’s perspective, physicians exist to work with the hospital to achieve its goals. In contrast, from the physicians’ perspective, the hospital exists to help the physicians meet their goals for their patients and to advance the physician’s professional career. Excelsior College HSC404 Case Study M5 2 NJOH’s Leadership Rosina Thomas was Chair of the Board of Trustees. She was an attorney who was in her second three year as Board Chair. She knew that her task was to bring independently minded competitors into an alignment with the hospital. Patrick Queenan had been appointed President and Chief Executive Officer of NJOH five years earlier. He had an MBA in Health Care Administration and started his career at NJOH twenty years earlier as an administrative resident. He knew the physicians and surgeons quite well, having worked with them for many years. Still, he had the diplomatic task of forming a coalition between independent competitive individuals and letting them see how it was in their interest to share a bundled payment rate with the hospital and each other. The Physicians Dr. Brooks Ellery was the senior orthopedic surgeon at NJOH. He and the members of his group were both specialists in the care and treatment of spinal injuries as well as general orthopedic matters. Dr. Timothy Darakian was the leader of the competing orthopedic group. Dr. Darakian specialized in joint replacement surgery having patented a version of the artificial hip earlier in his career. Dr. Darakian’s group was well-trained in joint replacement and the use of minimally invasive surgery. However, the orthopedic groups were intensely competitive for referral and consultations from primary care groups for general orthopedic work. The primary source of income for the orthopedic practices would be included in the ACO. As a result, the two groups had to agree to participate in the ACO in order for the project to be approved by the Centers for Medicare and Medicaid Services [CMS]. The rationale for the groups to participate included an expectation of increased volume related to the publicity regarding the ACO and to improved revenue per case based on the negotiated division of the bundled payment. Dr. Marvin Orchard was the Chair of Rehabilitation Medicine at NJOH. He and another physician and a staff of physical and occupational therapists provided post-op and follow-up care to patients from both orthopedic groups. Dr. Orchard’s fees were also to be part of the bundled payment within the ACO. Other specialties such as anesthesiology, pulmonary medicine, infectious disease, etc. were included in the ACO through fixed fee arrangements.

1. Analyze the last poor decision made by a group which you were a member. What do you think contributed to the group’s poor decision?

2. What group task roles do you think will be important in the new group? Do you foresee any of the individual roles being an issue? Who/Why?

3. What issues do you anticipate will arise during the storming stage of group formation for the ACO? How can these issues be effectively addressed?

4. What stage of decision making do you expect to be the most challenging for this group? Why?

5. What method of decision making would best allow the new ACO group to agree upon the means to secure the capital to build the necessary infrastructure of clinical information technology and work process design?