Dr Marietou Ouayogode Outlines ACO Financial Performance Findings

Research into the financial performance of Medicare accountable care organizations (ACOs) has found that organizations benefit from having prior experience with risk-bearing contracts, but that organizations that had reduced growth in healthcare spending before joining an ACO would find it difficult to improve further and share in savings, according to Mariétou Ouayogodé, PhD, post-doctoral fellow at The Dartmouth Institute for Health Policy and Clinical Practice at the Geisel School of Medicine at Dartmouth.

Transcript

Accountable care organizations are a few years old now: what have we learned about their financial performance?

In terms of financial performance we've seen that there's a lot of variation across organizations, and what we found was that prior experience with risk-bearing contracts, although it is not a compulsory condition, it did help. And it is suggesting that organizations with such experience have greater probability of doing better in this kind of environment.

Another thing that we learned was it takes time. So some organizations were not efficient—were high spenders to start with—may take a little more time to get to the point where they achieve savings and eventually earn shared savings. And what we've learned from our analysis is that efficient organizations—those that were able to reduce the growth in healthcare spending for their attributed beneficiaries—would find it a little more difficult. If they did that prior to implementing the ACO model, once they were in the ACO, since they already reduced so much of the waste, it will be very difficult now to reduce. There's not much left to purge out. As opposed to those who had more waste at baseline.

So the model is essentially creating, in a way, more opportunities for those who had more waste at baseline to achieve savings and eventually get shared savings from Medicare.