Do you have a spare $1.5 million? Because if you're running an ACO, that's the average cost of operational management according to the National Association of ACOs (NAACOS).

Of course, a substantial portion of that cost is driven by administration overhead. And, unfortunately, when you look at the transcript of the January 2015 Public Meeting of the Medicare Payment Advisory Commission, it's clear requirements won't be simplified anytime soon. Take a look at the 2014 financial results of Medicare ACOs here to see for yourself how narrow the margin can be. It seems if you want to run a successful ACO, you must be able to control operational cost.

Dr. Nerenz(1), Director of the Center for Health Policy and Health Services Research at Henry Ford Health System, rightly highlighted that the infrastructure operating costs are linked to contracting, the IT infrastructure, and the care coordination required. What do these things all have in common? CMS does not reimburse for them.

But, all is not lost. Do these three things to address common headaches and you can make the difference between a win and a loss for your ACO:

1. Streamline the contracting of physicians and practices

Key to ACO success? Keeping physicians happy and engaged. Reduce their operational headaches and make it easier for them to focus on care delivery rather than administrative burdens.

2. Keep the team small and efficient

One proven way to do this? Facilitate Care Coordination with the right tools and technology. This strategy worked extremely well for Scottsdale Health Partners (SHP), a successful ACO in Arizona as you can see in the video below.

3. Invest in the right IT infrastructure

When you have the right technology in place you can address future IT costs in the present. Consider tools specifically created for MSSP Management. When applications are built on top of the right IT infrastructure, you evolve more effortlessly to the perpetually changing regulatory landscape. And when you can adapt to change more quickly and easily, you reduce operational management costs.

Working closely with Scottsdale Health Partners and their physicians helped us identify the most pressing operational challenges. It is this data that helped spawn a solution that simplifies and encourages doctors' participation, reporting, and compliance. We streamlined ACO administrators' workflow with easy tracking of Medicare auditable elements; simplified user management; and provided assurances that the right person has access only to the information needed without breaching patient's privacy.

Many good canned applications exist today. But, in a world where granularity of privacy and security is so important, it's key to choose a solution with a strong background in complex data management. Which solutions do you have in place to help you track, drive, and sustain improvement initiatives? The answer for most, unfortunately, is “none.”

But, what if you could find a partner that can solve today's operational headaches, as well as help you achieve Population Health and the Precision Medicine of tomorrow, all without having to rethink your IT architecture and interoperability strategy every year as you grow?

So…Do you have a spare $1.5 million? With that partner, you may not need it.

Watch this video for more insight and see how one successful ACO is approaching ACO MSSP Management.

1. David Nerenz, Ph.D., is also Director of Outcomes Research at the Neuroscience Institute and Vice-Chair for Research in the Department of Neurosurgery at Henry Ford Hospital. He serves on the National Committee for Quality Assurance's Culturally and Linguistically Appropriate Services (CLAS) Workgroup and on the Accountable Care Organization (ACO) Technical Advisory Committee of the American Medical Group Association. Dr. Nerenz has served in various roles with the Institute of Medicine, including as Chair of the Committee on Leading Health Indicators for Healthy People, 2020. He serves on the editorial boards of Population Health Management and Medicare Care Research and Review.