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Report: ACOs Continue to Grow, Now Serve 16 Percent of U.S. Population

April 24, 2015
by Rajiv Leventhal
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The number of accountable care organizations (ACOs) continued to rise in the past year, though at a slower pace than in 2013, according to new research from consulting firm Oliver Wyman.

Almost 70 percent of the U.S. population now lives in localities served by ACOs, and 44 percent live in areas served by two or more. The total number of ACOs participating in Medicare programs has increased to 426, up from 368 in January 2014 and 134 in January 2013. Oliver Wyman has identified an additional 159 ACOs, bringing the estimated total to 585, up from 520 in January 2014, and 260 in January 2013.

The figures from the firm are based on the Department of Health and Human Services’ (HHS) announcement of the latest class of ACOs approved to participate in Medicare’s ACO programs. The firm further found that about 5.6 million Medicare beneficiaries, or about 11 percent of total Medicare beneficiaries, now receive their healthcare from ACOs participating in Medicare’s ACO programs. These organizations also provide care to 35 million non-Medicare patients, about 6 percent more than last year. And ACOs collectively serve between 49 and 59 million U.S. residents, or between 15 and 17 percent of the population, according to the research.

“The slowdown we’re seeing in the growth of ACOs was almost inevitable, given the pace of change of the past two years,” said Niyum Gandhi, a partner in Oliver Wyman’s Health & Life Sciences practice. “The next big spurt will be more in effectiveness and sophistication than it will be in growth in numbers of ACOs.” Gandhi also cites that the changes to the rules that the Centers for Medicare & Medicaid Services (CMS) proposed this past winter, especially the Next Generation ACO model, could give ACOs the boost they need to compete more aggressively. “ACOs have reached an important point in their evolution. The best deliver care at 10 or more percent below average with excellent quality and patient satisfaction. But most have not progressed nearly that far,” Gandhi added.

These results come in spite of the well-publicized departures from Medicare’s Pioneer ACO Program. A recent study from Harvard Medical School on Medicare Pioneer ACOs found that while the program achieved a savings of $118 million in its first year, the program needs tweaking, citing the 13 ACOs that dropped out of the program after 2012, despite achieving savings that were similar to those that stayed in the program.

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