Our team recently took a look at the Medicare ACO trends, and to us one thing was clear: executive teams of provider organizations should be thinking about the role that ACOs are playing in the market now more than ever. Why? Because the ACO financing model is becoming more dominant in the Medicare market-and becoming more successful at producing cost savings while taking on more risk. Our recent analysis of the Medicare ACO market found:
- In 2016, there were 8.4 million Medicare beneficiaries enrolled in ACOs, covering 14.7% of the Medicare population. This is an increase from 8% in FY 2014.
- There are now 618 Medicare ACOs. But those organizations have changed over time – at least 60 ACOs withdrew in the first three years of the demonstration, but new ACOs continue to join the program creating a net positive gain each year.
- The financial risk assumed by ACOs in on the increase-while the dominant contracting model is the more risk-limited Medicare Shared Savings Program, with 561 ACOs, there are now 57 ACOs in the risk-intensive “next generation programs.”
- ACOs are likely to stay an integral part of Medicare because they are demonstrating savings (~$1.2 billion over four years).