Health Reform

ACO Characteristics

In recent years, payers have moved towards shifting more financial risk to providers.  One of the most significant ways financial risk is passed to providers is through the creation of Accountable Care Organizations (ACOs).  The biggest ACO program is Medicare’s Shared Savings Program (MSSP).  Are ACO’s improving quality and reducing cost?  A paper by Schulz, DeCamp and Berkowitz (2015) finds:

Of MSSP ACOs that initiated operations in 2012 or 2013, 118 (54%) lowered expenditures compared with benchmark projections. In total, these ACOs generated $383 million in net savings for Medicare during their first performance year, with 52 ACOs earning shared savings payments of more than $315 million.

What do ACO’s look like?

Of these ACOs, 131 (42%) have more than 20 participating entities, while 42 (13%) are composed of only 1 (Table). More specifically, 140 (45%) included PCPs, specialists, and hospitals, 124 (40%) had PCPs and specialists, while 49 (16%) were composed entirely of primary care physicians.

The authors also found that large ACOs–those with at least 20 participating entities–were the most likely to generate savings.



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