ACOs are being used widely by commercial payers.
- Commercial ACOs cover some 17.2 million beneficiaries, more than twice as many as Medicare ACOs.1 The total number of commercial ACOs is estimated at 200 – 300.
- Seven of the ten largest ACOs in the US are commercial ACOs.2
- A 2014 survey found that 51% of current ACOs had entered into a contract with a private insurer.3
Which insurers are using ACOs?
The following payers hold the largest share of accountable care contracts:4
United Healthcare 4.0%
Blue Shield of California 3.7%
Oregon Health Plan 3.7%
How are commercial ACOs different from Medicare ACOs?
They are largely the same thing—though the exact details about payment incentives, sharing savings or losses, and outcome metrics vary greatly. The common thread running through all ACO and ACO-like arrangements, whether in Medicare or on the commercial market, is that some portion of provider reimbursement is linked to performance on cost and quality.
- Most commercial payer ACOs are under contracts that require them to share some financial downside risk, not just savings. In contrast, most Medicare ACOs are currently required only to share in savings.5
Are there different types of commercial ACOs?
The nature and structure of commercial ACOs vary widely. Some are structured like Medicare ACOs—combinations of hospitals systems, physician practices, and other providers focused on coordinated care. Others may be structured more narrowly—built around patient-centered medical homes or centers of excellence, for example. Some payers also establish ACO-like agreements with hospitals and primary care practices that hold providers accountable for successful improvement in patient health and lower costs.
Can you give a sense of the size of private payer ACOs?
- Cigna operates 150 collaborative accountable care initiatives in 29 states, encompassing more than 1.7 million customers and more than 69,000 doctors.
- United Healthcare reports that 11 million beneficiaries are enrolled in more than 520 accountable care type programs. It expects total payments to physicians and hospitals in such arrangements to reach $65 billion by the end of 2018.
Have any results been reported so far by commercial ACOs?
The results reported to date have been generally favorable, with reports of reductions in readmissions rates, emergency room visits, length of stays, and costs.
1 Muhlstein D, and McClellan, M; “Accountable Care Organizations in 2016: Private and Public Sector Growth and Dispersion,” Health Affairs Blog, April 21, 2016.
2 SK&A “Top 30 Accountable Care Organizations," SK&A Market Insight Report, 2014.
3 Lewis, VA, et al, “ACO Contracting with Private and Public Payers: A Baseline Comparative Analysis,” Am J Managed Care, 2014; 20 (12): 1008-1014
4 Leavitt Partners, Report, “Growth and Dispersion of Accountable Care Organizations: June 2014 Update.”
5 Lewis, VA, et al, “ACO Contracting with Private and Public Payers: A Baseline Comparative Analysis,” Am J Managed Care, 2014; 20 (12): 1008-1014