July 18, 2018

Share:

  • LinkedIn
  • Twitter
  • Facebook
  • Email

Medicare ACOs are designed to slow growth in Medicare spending and improve the quality of care delivery. Since the first ACOs were established in 2012, there has been a persistent question of whether the population health management and wellness measures employed by ACOs will result in fewer inpatient stays and lower hospital revenue. Can ACO participation be worth the financial risk for inpatient hospitals?  


Ultimately, no hospitals would be willing to join an ACO if lower revenue put the financial future of the hospital at risk. They just can’t gamble with their own financial health, which could lead to closure or consolidation. The Medicare Payment Advisory Commission (MedPAC), in its recent report to the Congress, put some of these concerns to rest.  

The MedPAC report, titled Report to the Congress: Medicare and the Health Care Delivery Systemsupports the view that hospital revenue can withstand the cost and care management required for successful ACO participation.  MedPAC reviewed several studies which showed that, despite concerns about reduced inpatient admissions, most ACO savings result from a reduction in post-acute care rather than reduced inpatient admissions. This is especially important as more and more ACOs are taking on both upside and downside risk.   

Hospitals need to demonstrate performance under the terms of the ACO model, which means controlling total costs of care. It also means creating new business models that shift from inpatient care to outpatient preventive care over time. Recent data from Caravan Health show that ACOs can be a strong business model for hospitals. Caravan Health ACO revenue, both total and net patient revenue, for our ACO member hospitals steadily increased after the hospital joined an ACO. Our 2015 starters showed net patient revenue growth of 46 percent from 2014 to 2017. Caravan Health’s 2016 starters showed 15 percent revenue growth over the same period. These results did not include any shared savings paid out after the close of the reporting periods which add to total revenues.  



Download our ACO Success Guide
 

Recent Articles and News

March 27, 2020

Managing the COVID-19 Crisis: Stop the Risk Clock for ACOs

Health care providers nationwide are responding heroically to the crisis of the COVID-19 pandemic. The virus is spreading, and our providers are on the front lines managing and treating more patients each day. Caravan Health calls on CMS to assure that the Medicare Shared Savings Program will fairly account for these extraordinary circumstances.

ACO, News, Policy, CMS

March 26, 2020

COVID-19: Primary Care Strategies to Support Alternative Care Delivery Methods

On March 20, Dr. Anna Loengard, Chief Medical Officer of Caravan Health hosted a video webinar and addressed the impact of COVID-19 on primary care including planning, prevention, patient management, and virtual care options.

ACO, News, Policy, CMS

March 16, 2020

COVID-19: A Summary of Emergency Government Funding and Medicare Telehealth Options

In response to the fast-moving global health emergency caused by COVID-19, Congress has approved $8.3 billion in emergency supplemental funding. The aid will help federal agencies prepare to manage and contain the spread of this highly contagious respiratory illness. In addition to providing funds for preparedness and response activities, the new law makes it easier for Medicare providers to evaluate their patients remotely during this national health emergency.

ACO, News, Policy, CMS

COVID attention

Early bird registration is now open for the 2020 Virtual Accountable Care Symposium.

ACO insights delivered right to you

Thank you

Sign up for our newsletter of data-driven news and stories from the latest in ACOs, value-based care, and population health.

  • Real-time insight into alternative payment model trends
  • Strategies and practices that drive results
  • Leadership lessons from health care and beyond
  • Perspectives on the changing health care landscape

By sharing your email you agree to our Privacy Policy

newsletter signup