The growth in numbers of accountable care organizations continued in 2014, although at a slower pace than in previous years. It may be too soon to know whether the slowdown is a blip or a sign of growth about to hit the wall.
Consultant Oliver Wyman studied Department of Health and Human Services data, and added its own research findings, to produce the report on 2014 ACO growth. What it found was that the numbers of Medicare patients covered by ACOs increased from 10 percent in 2013 to 11 percent in 2014. That represented a brake-slam compared to the uptick from 2012 to 2013 — 5 percent to 10 percent.
Meantime, non-Medicare patients covered by ACOs rose at about the same rate, with the 2014 numbers representing a drastic slowdown from 2012-2013 growth. Oliver Wyman said that the total number of ACOs stood at 585 at the end of 2014, a 12 percent increase over 2013. These numbers include 426 identified by HHS as Medicare approved ACOs and another 159 identified by Oliver Wyman's research.
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Access to ACOs services continued to increase, with about 70 percent of Americans now residing in a market served by a single ACO, and 44 percent in an area served by two or more, the report said.
Other key findings:
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About 5.6 million Medicare beneficiaries, or about 11 percent of total Medicare beneficiaries, now receive their health care from ACOs participating in Medicare's ACO programs.
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These organizations also provide care to 35 million non-Medicare patients, about 6 percent more than last year.
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ACOs collectively serve between 49 and 59 million U.S. residents, or between 15 and 17 percent of the population.
"The slowdown we're seeing in the growth of ACOs was almost inevitable, given the pace of change of the past two years," says Niyum Gandhi, a partner in Oliver Wyman's health & life sciences practice and one of the firm's experts on ACOs. "The next big spurt will be more in effectiveness and sophistication than it will be in growth in numbers of ACOs."
The report noted that "the very best ACOs are delivering care at 20 to 40 percent below the typical cost of care with excellent quality and patient satisfaction. But most have not progressed that far."
Part of the reason for the growth slowdown, the report said, is that the Centers for Medicare & Medicaid Services has yet to develop a shared savings system that offers true incentives for top performance among ACOs.
"CMS's rules actually make it difficult for some of the best players in the field to earn shared savings payments," Gandhi says. "Without them, these organizations cannot afford to invest as they'd like to — and as the rest of us should hope that they would. The changes to the rules that CMS proposed this past winter — and especially the next generation ACO model — may give the best ACOs the push they need to start competing more aggressively."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
