Hospitals not ready for ACOs' financial risks

More than 2 million Medicare beneficiaries now are enrolled in accountable care organizations, and their ranks continue to grow, according to a new survey by the Commonwealth Fund. However, Kaiser Health News reported that many hospitals may not yet be ready to assume the financial risks of an ACO operation.

According to the report, 2.4 million Medicare enrollees are involved in some form of ACO. Altogether, there were 221 ACOs in 45 states as of May. Of those, 148 are Medicare-oriented, with the rest serving private sector patients.

The Commonwealth Fund surveyed nearly 1,700 hospitals nationwide on ACOs, with 213 identifying themselves as participants. According to its data, 54 percent of hospitals in ACOs are in metropolitan areas, compared to 9 percent in small cities and 7 percent in rural areas. Sixty-four percent are aligned with a multi-hospital system.

Just over 54 percent of respondents say they are engaged in some form of capitated model, with the numbers almost evenly divided between those ACO participants who accept global capitation with full risk and partial capitation with some risk. Another 52 percent say they are engaged in a simple shared savings model, where savings are split among participants but there is no risk if expenditure forecasts are exceeded.

"We're really still at the very beginning of the adoption curve of the ACO model," lead author Anne-Marie Audet, M.D., told Kaiser Health News. "The challenge is that hospitals are still not ready to assume financial risk."

Audet noted that few ACOs are using systems that predicted which patients would need the most services due to their poor health, which further compounded their financial risks, according to Kaiser Health News.

To learn more:
- read the Commonwealth Fund report (.pdf)
- here's the Commonwealth Fund announcement
- check out this Kaiser Health News article

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