Survey shows ACOs are taking on greater financial risk, making cost reduction a primary challenge

stethoscope, coins and calculator
ACOs continue to make progress on innovative models that allow them to take on more risk and reduce healthcare costs.

New data suggest ACOs have become more comfortable taking on increased financial risk. Reducing costs and managing population health remain key challenges, however, prompting an investment in add-on technologies like population analytics. 

Zeroing in on recent developments in the ACO world, the National Association of ACOs and Leavitt Partners surveyed 240 organizations. The results, published on Health Affairs Blog, indicate that ACOs across the board plan to participate in “at-risk arrangements,” with nearly half opting for shared savings and losses, and another 38% pursuing capitation-based agreements.

The report also notes that as the number and sophistication of ACO contracts have increased, ACO providers have pursued alternative value-based payment methodologies in parallel. ACOs appear to have been particularly attracted to the patient-centered medical home model, present in 86% of the organizations surveyed. The survey also noted satisfaction with bundled payment models in some areas of care.

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With ACOs highlighting cost reduction as their foremost challenge, it's no surprise that organizations are searching for greater efficiencies through investments in care coordinators and health information technology. ACO's reportedly spend an average of $600,000 annually on operating expenses for health IT, and nearly 90% said care coordinators are "extremely" or "very important" to their success.

Meaningful use requirements have led to high EHR adoption rates among ACO providers, so a significant portion of IT spending is devoted to support tools like population analytics, patient portals and decision support tools. 

Monitoring the gaps between ACOs’ major concerns and current capabilities offers policymakers opportunities to help support the organizations as they transition to greater downside risk.

“Everyone wants value-based care, but in order to do that we need to support, learn, and continuously improve,” Clif Gaus, president and CEO of NAACOS, said in a release.

The report points out that the ACOs have a long way to go in terms of reforming their care-delivery systems, which will be the key to their success as they take on increased financial risk. While ACOs’ appetite for risk has increased, the survey suggests they will need support and patience from payers to undertake more radical changes to the way they deliver care.