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ACO Characteristics

By November 14, 2016Commentary

Accountable care organizations have spread rapidly, but their success in lowering costs or improving quality is as yet unsure.  A number of the early ACOs have dropped out of the Medicare programs.  ACOs are also very diverse in their characteristics and formality, with some being little more than IPAs, and others being fairly tight-knit and more intensely managed.  A Health Affairs article examines the current state of the ACO world.   (HA Article)  The authors estimate that there are now 838 ACOs covering around 28 million people.  They focus on differences in population covered, for example Medicare only versus also including commercial contracts; the use of new structures to deliver and manage care, such as team-based approaches; and the acceptance of risk and ability to manage it effectively.

Of the ACOs contacted by the authors, 399 responded to a survey.  171 of the ACOs were Medicare only.   228 had commercial contracts and of those, 75% also participated as a Medicare and/or Medicaid ACO.  The ACOs that had commercial contracts on average had a larger number of attributed Medicare beneficiaries.  They were more likely to have more than one hospital participant and to be jointly led by doctors and hospitals.  Commercial ACOs tended to have greater prior experience with payment reform models and risk-based contracting.  These ACOs had a greater density of primary care doctors and specialists.  Compared to the public program only ACOs, the commercial ones had lower Medicare savings, but higher overall quality scores.  Commercial ACOs also spent more effort on improvement of care efforts, like reducing unnecessary hospitalizations, and managing referrals tightly.  The authors conclude from their data that ACOs with private payer contracts are more likely to be sustainable than those that do a public payer only business.


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