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PCMH vs. ACO in Healthcare – Which is Best?


Many healthcare providers are facing the rising costs of providing medical care. These include drug, material, education, and other expenses.  At the same time, insurance costs for patients are also rapidly increasing.

Deciding how to provide medical care in the most efficient and cost-effective ways is becoming an increasingly complex healthcare management issue. In tandem with these problems is the impact of new technology on healthcare in a variety of ways. Interconnection of providers and standardization of communication methods is allowing for an increase in both transferability and accessibility of medical information and records.

The need for new models of healthcare has prompted a surge in alternative care models that are trending towards value-based approaches. These models can include coordination between healthcare providers to provide more comprehensive care. Two such models are ACOs and PCMHs discussed below.

What Is ACO in Healthcare?

What does ACO stand for in Healthcare? The Centers for Medicare & Medicaid Services (CMS) define Accountable Care Organizations (ACO) as health care providers, including hospitals and doctors, who agree to coordinate care to Medicare patients.

An organization that includes a wide range of providers can help in many ways such as cutting unnecessary costs and providing the right care at the right time for individual patients; balancing affordability with accountability. CMS encourages coordination and compliance with value-based care through the Medicare Shared Savings Program which offers “incentives for health care providers to work together to treat an individual patient across care settings, including doctor’s offices, hospital, and long-term care facilities.”

What Is the Goal of an Accountable Care Organization?

what does ACO stand for in healthcare?

An ACO, which can include many different providers, has the goals of providing the best quality service to patients at the best possible time. They also collaborate to avoid duplication of services, prevent medical errors, and reduce costs. Besides focusing on the value of care provided to a single patient, ACOs also focus on population health.

Some major organizations with many employees are forming or joining ACOs with healthcare providers to manage preventative care and help reduce healthcare costs to employees. Health information management consulting companies cite HIM via electronic data interchange (EDI) as an essential goal that can impact the quality of care between providers.

As part of the focus on cutting costs and offering efficient care, how providers are reimbursed is changing as well. ACOs also have a joint goal of qualifying for and meeting the standards for value-based care such as the Medicare Shared Savings Program.

Managing costs is a critical component of Revenue Cycle Management for any healthcare provider. Healthcare RCM firms like Nearterm can help you improve processes concerning these financial concerns.

What is a PCMH Provider in Healthcare?

What is a PCMH provider? A Patient-Centered Medical Home (PCMH) is a place and a way of organizing care that can involve coordinating between healthcare providers such as nurses, pharmacists, nutritionists, and social workers. These providers focus more on partnerships with individual patients and their families to provide high-quality care at affordable rates.

The focus on medical homes ranges from assisted living facilities, home health care, nursing homes and larger communities of various models. Since the concern is on patient-centered care, it can be thought of as a bottom-up approach to healthcare. For more information, reach out to the healthcare management consultants at Nearterm today.

What is the Goal of a Patient-Centered Medical Home?

Focusing on value-based patient care involves considering patient needs from the home up. This can include coordinating care between providers for basic and also special home healthcare needs. A key component of PCMH care is the relationship between the patient and accountable health care providers.

Accountable providers can be a primary physician or team of professionals with the joint goal of efficiently managing the patient’s healthcare and even social needs. PCMHs can provide accessible services quicker, offer enhanced personal care around the clock, and alternative methods of communication with providers. This also includes carefully managing evolving patient care such as transitioning from assisted living to more advanced care needs. Coordinating care also carries the potential of reducing costs and passing additional value on to the patients.


what is ACO in healthcare?

Patient-Centered Medical Homes and Accountable Care Organizations are not the same although they both focus on patient care by coordinating services between healthcare providers and can include long-term care. How they approach patient care is fundamentally different.

PCMHs are more centered on the individual patient with consideration to their living accommodations and end of life treatment. A PCMH can join or be a part of a larger Accountable Care Organization.

In contrast, ACOs coordinate services between providers to offer better services at reduced rates that include considering government reimbursement requirements. Their focus is not just on individual patient care but also population health management for larger areas.

To determine which option is the best choice for any provider involves considering many complex elements. Nearterm’s Healthcare Management Consultants will help you decide what factors to review and provide more information. Contact Nearterm today to learn more about how we can help improve your patient care through enhanced management coordination.