The Accountable Care Organization (ACO) is a payer-provider partnership model of health
care delivery based on four fundamental goals: improve quality of care, reduce unnecessary
costs, promote coordinated care and strengthen preventive care services.
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The ACO program was created in the Patient Protection and Affordable Care act (PPACA)
to become accountable for the overall care and costs of the Medicare beneficiaries.
ACOs can be formed among primary care physicians, specialists and hospitals to jointly
care for patients while seeking financial incentives for shared savings.
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According to the National Association of ACOs, there are 558 organizations serving
more than 12.3 million beneficiaries in the United States as of January 2020.
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More importantly, ACOs in the Medicare Shared Saving Program saved $739.4 million
in 2018.
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In early 2020, Korea has started the Korean style-ACO pilot program with one designated
hospital for each region.
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Korea's interest in the ACO system has sparked since the Korean health insurance system
has been struggling with financial depletion; Korea has learned that the Medicare
ACO model has been remarkably successful in decreasing healthcare costs and increasing
overall quality of care in the United States.
Due to the significant increase in chronic disease in the elderly population, medical
expenses are also increasing rapidly every day in Korea. It is therefore vital to
shift care from hospitals to low-cost settings by creating integrated traditional-conventional
medicine collaboration to focus on prevention, disease management and palliative care.
As a vast number of patients are currently using Korean Medicine to treat various
illnesses in Korea, the potential involvement of Korean Medicine in the upcoming Korean-style
ACO system will be outlined in this article.
Korean medicine is one of the most distinguished traditional medicine in the world.
According to the 2017 Korean Medicine Utilization and Herbal Medicine Consumption
Survey, 73.8% of the total respondents have used KM; women (79.1%) have used more
than men (68.4%); adults aged 60 years and above have used the most accounting 90.6%
and rural residents (73.2%) have experienced more than urban residents (77%).
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Along with the strong demand for Korean medicine and the relatively large KM workforce,
utilization of Korean medicine practices as primary care physicians (PCP) will substantially
improve access to primary care and chronic disease management.
Considering the functions and roles of primary, secondary and tertiary medical institutions
have not properly established in Korea, patients are inclined to use the tertiary
hospitals only. The introduction of the KM-based PCP system is much needed to hinder
patient concentrations on large hospitals, acting as gatekeepers.
Integrated traditional-conventional physician-led ACO may be a superb option to reduce
healthcare expenses and improve Korea's quality of care. A pilot study by Dusek et al.
indicated that the patients who received integrative medicine therapies had a cost
savings of $898 per hospital admission.
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In addition, recruited patients at a large California community hospital reported
substantial improvements in their overall health and mentioned that an integrative
health clinic could co-exist at a western medical center.
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(#3)
Although traditional-conventional physicians have been working together at various
Korean medicine hospitals, not many referrals have been made to Korean medicine clinics
from conventional medicine clinics. This may be the best time to seek strategic partnerships
between traditional and conventional physicians.
Physician-led ACOs participating in the Medicare Shared Savings Program are significantly
outperforming hospital-led ACOs. Especially, the new ACOs are increasingly led by
physician groups rather than hospital groups. In 2018, physician group—led ACOs represented
approximately 45% of all ACOs, hospital-led ACOs accounted for approximately 25%,
and joint-led ACOs represented 30%. There is greater market potential for new physician-led
ACOs than for those led by hospital systems; hence, physician-led ACOs will likely
be the dominant type of ACO in the future.
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In a situation where chronic diseases are gradually expanding, patients are in need
of continuous management at the community level, not the advanced medical services
at the tertiary hospitals. With that said, the Korean style integrated ACO model should
consider an option to limit the utilization within communities. The urban-rural healthcare
gaps will certainly minimize as providers are expected to share the responsibility
of a defined population for the overall costs and quality of care in the ACO model.
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By promoting care coordination throughout the country, it is also expected to reduce
waste or duplication of services across the care continuum. (#4)
Unfortunately, the practice of medicine is heavily focused on treatment in Korea;
providing healthcare service through a network of local medical institutions will
benefit patients to receive continuity of care and have greater access to preventive
care. It is important to help providers understand that prevention has long-term economic
effects that reach far beyond medical costs.
Overcoming physician attitudes favoring autonomy rather than collaboration will pose
a major challenge to pursue an integrated ACO in Korea. By implementing integrated
strategic partnerships, patient satisfaction will improve by providing quality services
and patient referral management to reduce duplication and unnecessary services.
As patients do not have enough barriers to visit any clinics and hospitals in Korea,
it automatically builds up competitiveness rather than cooperativeness. Moreover,
the preference for patients to use the tertiary hospitals is strong so that inefficiency
of hospitals is a pervasive problem. Thus, promoting strategic partnership of providers
will not only disperse patient concentration in tertiary hospitals but also substantially
improve chronic disease management.
Most importantly, it is difficult to implement a supply system model in which cost
saving or reduction is shared among suppliers by providing integrated and coordinated
care in Korea. Therefore, payment reform is required to support providers.
As a basis for achieving quality and cost reduction at the same time, it is necessary
to develop an integrated healthcare system. This may be difficult and will take a
long time to achieve, incorporating the Korean medicine-conventional medicine education
curricular should be the essential first step. The integration of training and education
program for both Korean medicine and conventional medicine has proposed previously,
but it has yet to accomplish.
Promoting the integrated traditional-conventional ACO will evolve toward a model that
will require ongoing investment in both technology and personnel to enable team-based
care. Building the necessary infrastructure related to administration, electronic
health record system establishment and maintenance can be costly; however, Korean
government should invest and support the combined effort as sharing patient data among
the providers will improve patient quality of care and overall outcomes.
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The opportunity to boost integrative medicine, reduce cost and improve quality of
healthcare in Korea is immense.
Even in the U.S. health care system, where private insurance is mainly developed and
medical technology is rapidly developing,
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the rate of increase in medical costs is faster than in any other country. Concerns
over rising medical expenses due to an aging population and an increase in the number
of people with chronic diseases are not unique to Korea.
Therefore, engaging Korean Medicine physicians into the integrated-ACO model is an
innovative alternative to Korea's health care delivery system for two main reasons.
They are trained to examine patients’ overall health regardless of the present symptoms
and are easily accessible as most of the physicians have their local clinics. Second,
KM physicians have earned trust from elderly patients, managing their chronic diseases,
treating various musculoskeletal disorders, etc. It is noteworthy that traditional
medicine physicians are generally better at doctor-elderly patient communication than
conventional medicine physicians.
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(#5)
As a stringent recommendation, it is vital for Korean healthcare delivery system to
move from traditional fee-for-service payment to value-based alternative payment models,
such as accountable care organizations. On average, ACO patients are spending modestly
less on health care services and are associated with improved patient satisfaction
and other patient-reported measures.
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Hence, the promotion of the Korean style integrated traditional-conventional ACO will
transform the current Korean volume-based payment system to a value-based system will
not only improve the overall level of public health but also control the increase
of the health insurance expenditure.
Author contributions
Investigation: BYY, CHC, BHJ and SGK. Writing – Original Draft: BYY. Writing – Review
& Editing: BYY, BHJ and CHC. Supervision: BHJ and SGK.
Conflict of interest
The authors have no conflict of interest to declare.