ACO competition heats up, varies by region

Much of the growth of accountable care organizations (ACO) is attributed to a ripple effect: When one institution forms an ACO, its competitors often follow suit, according to this week's report by Leavitt Partners' Center for ACO Intelligence.

"A quiet scramble is clearly underway," Andrew Croshaw, managing director at Leavitt Partners and director of the Leavitt Partners Center for ACO Intelligence, said in a press release Monday. "In certain markets, competition to establish leadership is already emerging."

Due to the rush to compete, ACOs may be prolific in certain areas while sparse in other regions of the country, the reports notes. Even though ACOs are still in their infancy, certain pockets are already hotbeds for accountable care activity: Texas, California, and Michigan. Generally, states with larger populations have more ACOs, according to the report.

"Adoption of this model will vary greatly due to both regional differences as well as variations among the sponsoring entities," the report states.

Of the 164 ACO-identified organizations that researchers looked at, nearly two-thirds of them (60 percent) were started by hospitals or health systems, indicating a trend toward hospital systems leading ACO development.

Leavitt Partners examined the trends of "ACO or ACO-like organizations," meaning the report loosely defined an ACO as one that is "financially accountable for the health care needs of a population, manage the care of that population and bear that responsibility at an organizational level."

Although the National Committee for Quality Assurance last month launched accreditation standards for ACO certification, there's no mandatory accreditation or requirements to become (or call oneself) an ACO.

To qualify for Medicare's Shared Savings, however, the Centers for Medicare & Medicaid Services (CMS) in October issued its final guidance for eligibility. CMS estimates 50 to 270 ACOs will sign up to participate in the Medicare Shared Savings Program, generating a net savings of $940 million during the first four years, according to a recent report by the Urban Institute and the Robert Wood Johnson Foundation.

For more information:
- read the press release
- check out the report

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