May 15, 2018

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Recent Health Affairs Blog posting from Caravan Health authors describes a new model for ACO success

Caravan Health leads the market in guiding health providers as they form and manage Accountable Care Organizations. We have seen ACOs succeed and we have seen them struggle and we have seen that some ACOs – despite their best efforts – fail to realize savings through better care management and prevention. Some of those reasons are about organizational culture – are the right people doing the right jobs? A few of them are technical – is the staff making the best use of data and properly coding for maximum reimbursement? Then there is the implementation of programs – care coordinators, transitions of care, efficient referrals that help determine whether the ACO is actually saving money over Medicare fee-for-service?

But by far the most important reason why ACOs struggle is not within the control of the individual health provider. The reason is ACO size – they don’t have enough lives under management to understand their performance. The only way to achieve predictable success is to get bigger – an ACO with at least 100,000 attributed lives will know that its measured performance is close to its true performance. With fewer lives, savings can be lost in the statistical noise.

Read a recent post in the Health Affairs blog from Caravan authors describing the dilemma facing ACO operators and CMS, and the collaborative ACO structure that can answer the challenge.

Whether or not your organization is part of an ACO right now, Caravan Health can help you get into a right-sized ACO that can reliably demonstrate predictable savings while maintaining your independence and local control.



The statistics show that as ACOs grow larger, they can be more confident that their demonstrated savings will beat the benchmark. An ACO of 100,000, for example, can be 90 percent confident that its program results will fall within about 1 percent of its true performance. By contrast, an ACO with 30,000 lives that is actually saving 4 percent will have barely 75 percent confidence it will beat its 2.4 percent.

Learn More about Collaborative ACOs

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