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The Essential Correlation Between Capital Formation and the Building Of Value Metrics in ACOs
The Journal of Health Care Finance
View Archive Info| Field | Value | |
| Title |
The Essential Correlation Between Capital Formation and the Building Of Value Metrics in ACOs
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| Creator |
Cimasi, Robert James; Robert James Cimasi, MHA, ASA, FRICS, MCBA, CVA, CM&AA HEALTH CAPITAL CONSULTANTS St. Louis, Missouri Zigrang, Todd A.; Todd A. Zigrang, MBA, MHA, FACHE, ASA HEALTH CAPITAL CONSULTANTS St. Louis, Missouri |
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| Description |
As the U.S. healthcare delivery system continues to evolve from a volume-driven payment system toward an outcome-centered, value-based reimbursement system, developing a sustainable financial model is vital and will necessitate complex, detailed analyses of the challenges and opportunities involved in supporting the investment in a new accountable care organization (ACO). Since the passage of the Affordable Care Act (ACA) in 2010, the number of emerging healthcare organizations, such as ACOs, which have developed to address this shift to value-based purchasing, has grown from 41 to over 600. Healthcare decision makers seeking to establish an ACO are well served by first developing a financial plan that will afford the organization adequate capital funding necessary for both the ACO’s initial capital investment and for working capital to finance ongoing operations until the new ACO generates sufficient revenues to become self-sustaining. This paper provides an overview of the capital concepts related to the investment categories pertinent to the development of ACOs, as well as, the decision-making process involved in attracting, structuring, allocating, and budgeting the requisite capital. It also presents the concept of value metrics with a discussion of cash flows and feasibility analysis, and the various analytical methods related to determining the financial feasibility of, and value in, developing an ACO. The paper concludes with a brief synopsis of relevant regulatory considerations involved in ACO capital formation that should be addressed in the development, implementation, and operation of an ACO, e.g., Anti-kickback Statute, False Claims Act, Stark Law, Fraud and Abuse, Antitrust, and Tax Exempt Status.
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| Publisher |
Worldwebtalk.com, Inc.
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| Contributor |
—
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| Date |
2015-09-22
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://healthfinancejournal.com/index.php/johcf/article/view/43
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| Source |
Journal of Health Care Finance; Vol 42, No 2: Fall 2015
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| Language |
eng
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| Relation |
http://healthfinancejournal.com/index.php/johcf/article/view/43/45
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| Rights |
Copyright (c) 2016 Journal of Health Care Finance
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