How ACOs can generate more shared savings
Despite the significant start-up costs and time invested by providers to establish Accountable Care Organizations, initial results have been mixed. Although many have been able to improve quality measures, the number of ACOs that have generated shared savings is disappointing to some. Based upon the recent CMS announcement, 29 percent of MSSP ACOs (97 out of 333) earned shared savings for 2014. That is slightly better than the 24 percent (53 out of 220) that earned shared savings for 2013).
The limited success in shared savings is disappointing because many believed that the shift to preventive, coordinated care would lead not only to healthier populations but reduce the need for higher-cost, episodic care. Achieving shared savings is a critical milestone for ACOs to demonstrate success in the new reimbursement model, the proposed model of care in the future. Many providers also seek to increase the percentage of their revenue that comes from risk-based contracts in order to raise margins and pursue new revenue opportunities through commercial contracts. To execute that strategy, ACOs must be able to demonstrate the ability to lower the cost of care for “at risk” populations.