Accountable Care Organizations are Helping to Control Rising Healthcare Costs

With the passage of the affordable care act, healthcare organizations were encouraged to collaborate and infuse value into the American healthcare system. One incentive was for hospitals and other healthcare providers to work together to form Accountable Care Organizations (ACOs). The purpose of these organizations is to help reduce the total cost of providing care by delivering higher quality care designed to keep patient healthy.

So far, this endeavor is paying off. From the Medicare Shared Savings Program (MSSP) alone, 60% of participating ACOs have generated over $1 Billion in savings for the Center of Medicare and Medicaid Services (CMS). After sharing the savings back with the ACOs, CMS has achieved an impressive $313.7 Million in savings from the program. Since the program’s launch in 2012, participating MSSP ACOs have shown that participation in the program over a longer period really has its rewards.

Even rural providers, a typically revenue and resource-strapped segment, are helping CMS realize savings through the MSSP program. Through the ACO Investment Model (AIM), CMS has spent approximately $58 million in loans to qualifying rural ACOs. Today, CMS has gained approximately $82.8 Million from the program’s first performance year in 2016.

For those that are taking on risk, such as participants in the Next Generation ACO model, CMS is also realizing savings. In the first year of performance, 2016, Next Gen ACOs created a net savings of $62 Million, representing a 1.1% net reduction in Medicare savings.

These reports show that focusing on value and quality in healthcare can benefit both patients, providers, and payers when incentives align. As suggested in the recent report for the AIM program, a key to success is more effective collaboration between the rural hospitals and primary care doctors. With this collaboration, these ACOs are better managing patient care and focusing on preventive measures.

As the ACO program continues to change, it is important to understand how these savings are achieved and how participating organizations can see greater results quicker. As we have explored, patient engagement and effective care coordination play a critical role in scaling efforts and generating additional savings.

Read on to access more information about engaging patients to improve ACO performance.

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