ACOs Don’t Pay

Investors creating ACOs are unlikely to profit from them:

The current Medicare Shared Savings Program anticipates a minimum performance period of only 3 years. An ACO making the mean initial investment of $1.7 million will require the unlikely margin of 20% for the 3-year period envisioned by CMS.

Doctors do not fare well either:

  • The available data indicate that 8 of the 10 Physician Group Practices in the demonstration did not receive any shared savings payments in year 1.
  • In the second year, 6 of the 10 practices did not receive such payments,
  • And in the third year, half the participants were still not eligible for any shared savings to offset their initial investment.

HT to David McKalip.

Comments (5)

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  1. Bruce says:

    Aaah, …. now the dirty little secret is revealed. ACOs don’t work!!!

  2. Devon Herrick says:

    And to think I just read a press release about a Commonwealth Fund study that suggested… “If implemented successfully, accountable care organizations (ACOs) have the ability to achieve better care, better population health, and lower costs…”

    That’s a big “if”!

  3. Linda Gorman says:

    Note the emphasis on population, not individual, health in the Devon’s Commonwealth quote.

    How does one create a healthier population? Let the sick people die. Saves money, too.

    This is what we often refer to as poorly aligned incentives.

  4. Paul H. says:

    It’s almost as if this were some cruel hoax.

  5. Vicki says:

    This reminds me of Linus, Lucy and the football.