The ACO Antitrust Police — Nothing to Do

One of the biggest concerns about ACOs has been their potential to enable market consolidation— that by uniting health care providers the ACO gains market clout and ability to charge higher prices.

While this is a legitimate concern about ACOs, so far it’s not playing out.

Why?

 

1) ACOs to date are small. Let’s do the math. CMS reports that Medicare ACOs approved so far will be serving 1.1 million beneficiaries. There are a total of 65 ACOs — 32 in the Pioneer model,  27 in the Shared Savings model, and 6 in the Physician Group Practice Transition demo. That’s an average of 16,900 beneficiaries per ACO. The largest new ACO expects to have 70,000 beneficiaries.

These small ACOs are experiments, not attempts to consolidate markets. At least not yet.

2) Many ACOs are physician led. For example, in the latest batch of Medicare Shared Savings ACOs, 21 of 27 are physician led.

Physician led ACOs could well lead to a much more competitive marketplace, especially to the extent that they view the hospital as the major target of cost saving opportunities.

So for now the ACO antitrust police have nothing to do.  I suggest reassigning them to Facebook or Google, and check back in a year.

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