Medicare Announces 27 ACOs. A New Species?

I’m surprised and intrigued by Medicare’s announcement of 27 new Shared Savings model ACOs.

Surprised

I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care. My expectations had been that we would see either:

Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.

Bust — no one showed up at the party. Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.

Intrigued

What we got is something in the middle:

  • Very small ACOs. Many only meet Medicare’s minimum of 5K patients; most are in the 8 to 25K range; and the largest ACO anticipates 70K patients. Collectively these 27 ACOs plan to serve 375K patients, less than 1% of the entire Medicare population.
  • 13 are smaller, physician led
  • Only 10 hospitals are involved across the 27 ACOs
  • Very few household names

My biggest question: can they capitalize and develop the infrastructure needed to play in the ACO marketplace?

This isn’t the defining moment I thought it would be.

But that defining moment might be just around the corner. Medicare’s announcement included a mention that they have 150 more Shared Savings ACO applications waiting in the wings. Is the boom around the corner? Expect more information early in July.

A New Species?

Are we seeing the emergence of an entirely new species in the ACO forest?

One that promises to be lean, entrepreneurial, and small enough to be closely in touch with its patients?

One that senses the opportunity to create a new business and clinical model by tightly coordinating care and having no second thoughts about emptying hospital beds?

That’s my hunch. We’ll see.

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