Few ACOs Ready to Accept Financial Risk for Patient Management

Few hospitals interested in becoming accountable care organizations are ready to take on financial risk, according to a survey released by The Commonwealth Fund. There are already 154 Medicare Shared Savings Program ACOs serving nearly 2.4 million Medicare beneficiaries, and dozens more ACOs are involved in partnerships with private insurers. But so far, the majority of ACOs are pursuing models that allow them to share in any savings they achieve without losing money if they fail to cut costs. In other words, there’s a lot of carrot but not much stick.

The Commonwealth Fund report suggests that’s likely to continue, though hospitals are making advances in how they manage patient care, specifically related to use of data and electronic medical records. The nationwide survey of nearly 1,700 hospitals measured hospitals’ readiness to participate in ACOs. It was conducted in September 2011, before the federal government released final rules for the Medicare Shared Savings Program.

Only thirteen percent of respondents reported that they were either already participating in an ACO, or planning to participate in the next year.

The results show that hospitals already involved with ACOs are improving the coordination of patient care and doing a better job of ensuring safe transitions among care settings—both hallmarks of the ACO model. At the same time, it’s clear that hospitals will need to strengthen their capacity to undertake population-based care and to fully assume financial risk for the patient population for which they are accountable. The survey results indicate that the use of data analytics and electronic medical records are an integral part of successful population health management.