Distinguishing Between Managed Care Organizations (MCOs) and Accountable Care Organizations (ACOs)

Introduction

The evolution of the U.S. healthcare system has been marked by the pursuit of cost-effective, high-quality care for diverse populations. Managed Care Organizations (MCOs) and Accountable Care Organizations (ACOs) represent two distinct strategies aimed at addressing these challenges. While MCOs aim at managing expenses by functioning on network care and payment approaches, ACOs center on value care, connecting providers to optimize results. The following paper aims to review the histories of MCOs and ACOs, the served populations and the importance of a nurse-patient relationship in such models: Distinguishing Between Managed Care Organizations (MCOs) and Accountable Care Organizations (ACOs).

History of Managed Care Organizations and Accountable Care Organizations

Need for Payment Programs
Numerous changes in the health field in the past years have become a catalyst for the call for additional payment mechanisms. Fee-for-service systems, which incentivized the volume of services rather than their value, contributed to inefficiencies and unsustainable spending. Consequently, the emergence of MCOs and later ACOs sought to curb these issues by emphasizing cost containment and quality improvement.

Managed Care Organizations (MCOs)
MCOs began in the 1970s; nonetheless, they gained societal prominence after the passage of the Health Maintenance Organization (HMO) Act of 1973. This legislation intended to lower the cost of health care through prepayment and managed care. During the 1980s-1990s MCOs grew considerably and the types of models introduced included Preferred Provider Organizations (PPOs) as well as Point-of-Service (POS) plans (Namburi & Tadi, 2023). They were constituents of extensive communities of net care, systems of capitation payments, and restriction of costs using utilization reviews.

Accountable Care Organizations (ACOs)
MCOs were developed in the 1990s and ACOs took their place in the early 2000s because ACOs provided better and patient-oriented medical care. They were essentially legalized under the ACA of 2010 through the Medicare Shared Saving Program (MSSP). They practice the value-based care approaches with a focus on the side of shared savings, integration of care, and quality (Spivack et al., 2022). ACOs are traditionally different from MCOs as the latter tend to unify separate providers into one network and align their financial incentives with the revenue for services they deliver.

Populations Served by MCOs and ACOs

Managed Care Organizations
Historically, MCOs supported mostly employer-based insurers who are employed, emphasizing low costs and utilization. With time, this practice has grown in its coverage extending to Medicaid clients to provide health coverage for individuals and families who could barely afford health facilities. Today, MCOs address a client base of children, adults, and seniors and aim at the prevention of exacerbations of chronic diseases and the minimization of avoidable readmissions. There are also emerging trends focusing a lot more on the aspect of social determinants of health (SDOH) to better address the needs of the population (Constantin & Wehby, 2024).

Accountable Care Organizations
ACOs primarily target Medicare beneficiaries, particularly older adults and those with chronic illnesses. Their patient population has grown to include individuals covered by Medicaid and private insurers participating in value-based care arrangements. ACOs are uniquely positioned to address the needs of high-cost, high-need patients, focusing on reducing readmissions and improving preventive care. Since their inception, ACOs have broadened their reach, integrating underserved populations to promote equity in healthcare access and outcomes.

Changes to Populations Served
The MCOs and ACOs have evolved in response to the transition in the healthcare systems. New roles allow MCOs to address behavioral health and long-term care, both of which have become more integrated into services; ACOs, on the other hand, have embraced telemedicine and emerging technology to deliver services to rural and underserved areas. All these changes highlighted continued attempts to respond to the multiple needs of culturally diverse groups.

Role of Nurses in Interfacing with MCO and ACO Patients

Role in Specialized Nursing Areas
In specialized nursing areas, such as chronic disease management and community health, nurses play a vital role in interfacing with patients under both MCO and ACO frameworks. For MCOs, nurses play the role of a case manager and within the framework of the network, they help to schedule and arrange referrals for patient care and help control and monitor treatment that is cost-effective. In ACOs, nurses work in transdisciplinary care teams to deliver high-quality care alongside monitoring patient transitions and helping patients understand how to avoid diseases.

Positive Impacts of Nurses
Nurses significantly contribute to improving patient outcomes by fostering trust and ensuring care continuity. In MCOs, they improve care outcomes by managing high-risk patients more effectively lowering the rate of admissions, and emergency use. In ACOs, the nurses’ teaching and disease management promote health literacy and self-management, which enables an approach to value-based care (Molina-Mula & Gallo-Estrada, 2020). Also important is that matters of social determinants of health disclose the nurses’ potential to advance the diverse patient groups, demonstrating their capability to deal with distal factors.

Potential Challenges
Despite all these effects, nurses experience certain concerns while attending MCO and ACO patients. Issues like, Pre-authorization processes in the MCOs become nightmares for those managing the clinic or hospital and take focus away from patient care. Similarly, in ACOs, the practical shift of how care is delivered during a calendar year to meet quality goals within constraints can also be challenging (Radfar et al., 2021). Another model of the realism approach, nurses have to solve the issue of fragmented and unequal care delivered to individuals.

Conclusion

The understanding of MCOs and ACOs is that they are closely related but provide two different solutions related to costs and quality in the healthcare systems. While MCOs prefer the network-based and cost-reduction model, ACOs promote a collaborative and value-based approach. The multiplicity of the nurses involved in enhancing interrelated care coordination in both systems helps in the improvement of care for the patient and the delivery of education on the necessity of care. Three key takeaways emerge:

1. The evolution of MCOs and ACOs underscores the shift from volume-based to value-based care.
2. Nurses are integral in bridging administrative and clinical goals, ensuring holistic patient care.
3. Continuous adaptation to address population needs and disparities remains crucial for both models.

References

Constantin, J., & Wehby, G. L. (2024). Effects of Medicaid Accountable Care Organizations on children’s access to and utilization of health services. Health Services Research, 67(78). https://doi.org/10.1111/1475-6773.14370

Molina-Mula, J., & Gallo-Estrada, J. (2020). Impact of nurse-patient relationship on quality of care and patient autonomy in decision-making. International Journal of Environmental Research and Public Health, 17(3), 1–24. https://doi.org/10.3390/ijerph17030835

Namburi, N., & Tadi, P. (2023, January 30). Managed Care Economics. PubMed; StatPearls Publishing. https://www.ncbi.nlm.nih.gov/books/NBK556053/

Radfar, M., Hemmati Maslak Pak, M., & Mohammadi, F. (2021). “The organizational and managerial challenges experienced by nurses recovered from COVID‐19: A phenomenological study.” Journal of Nursing Management, 67(78). https://doi.org/10.1111/jonm.13394

Spivack, S. B., Murray, G. F., & Lewis, V. A. (2022). A decade of ACOS in Medicare: Have they delivered on their promise? Journal of Health Politics, Policy and Law, 48(1). https://doi.org/10.1215/03616878-10171090

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For this assignment, you will distinguish between Managed Care Organizations (MCO) and Accountable Care Organizations (ACO). Your paper will include the following:

• Provide a brief history of both the MCO and ACO.
• Define the populations MCO and ACO are intended to serve.
• Analyze your role in your specialized area of nursing practice when interfacing with an MCO and ACO clients/patients.

The word count for your paper, excluding the title page and references page, will be 800 words.

Distinguishing Between Managed Care Organizations (MCOs) and Accountable Care Organizations (ACOs)