Accountable Care Organizations (ACOs): A Growing Force in American Healthcare

Mar 27, 2024 | Uncategorized

Recent research from Oliver Wyman reveals a significant milestone in American healthcare:

Nearly 10 percent of patients in the U.S. are now receiving care through Accountable Care Organizations (ACOs). This finding underscores the rapid emergence of ACOs, once obscure just a couple of years ago, as substantial players in the healthcare landscape, with the potential to challenge traditional fee-for-service models.

According to Niyum Gandhi, co-author of the study, the perception of ACOs as minor players in healthcare is outdated.

The study, which encompassed various healthcare delivery entities that align with the core principles of ACOs, demonstrates their growing influence. ACOs, characterized by taking responsibility for the overall health needs of a specific population and receiving incentives based on cost savings and quality, are reshaping healthcare delivery.

The proliferation of ACOs is not limited to Medicare programs; commercial ACOs are also on the rise. With Medicare currently hosting 150 ACOs, expected to double in number with the announcement of the next round of participants in the Shared Savings Program, the impact is set to expand further. Notably, many organizations participating in Medicare ACOs eventually extend this model to their non-Medicare patient populations.

Currently, between 25 to 31 million Americans receive care through ACOs, spanning various programs and initiatives. This includes Medicare ACO programs, non-Medicare patients in Medicare-oriented ACOs, and those in non-Medicare ACOs.

The study’s analysis reveals a striking statistic:

45 percent of Americans reside in areas served by at least one ACO, with 19 states boasting a majority of their population covered by ACOs. However, critics contend that many current ACOs fall short of realizing the full potential of the model. Rick Weil, another co-author of the study, acknowledges this disparity but highlights the exceptional performance of leading ACOs. These top-tier ACOs are demonstrating remarkable outcomes, such as achieving zero percent premium increases, challenging longstanding beliefs within the healthcare industry.

As ACOs continue to refine their models and improve performance, they have the capacity to revolutionize the dynamics of American healthcare for the better. This shift promises increased efficiency, better outcomes, and ultimately, improved healthcare experiences for patients nationwide.