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For the Right Employers, ACOs Can Bring Shared Savings

Mary K. Caffrey
The accountable care organization, or ACO, can be a mechanism for employers to achieve healthcare savings, according to a just-published article in The American Journal of Accountable Care, the publication of The American Journal of Managed Care dedicated to healthcare reform.
Employers seeking ways to get better quality and value for their healthcare dollar are gaining interest in accountable care organizations, or ACOs, according to a new article published this month in The American Journal of Accountable Care.

Authors Suzanne F. Delbanco, PhD, and David Lansky, PhD, write that ACOs, which are vehicles for improving population health, have the potential to allow some employers to participate in the shared savings available to payers and providers, under certain conditions.

But not every healthcare provider is ready for such an arrangement, which the authors write, “requires committing to population health improvement targets and to assuming financial risk. And not all employers and other healthcare purchasers are ready either.”

Delbanco and Landy proposed a “glidepath” that employers can use to ease the transition into such an arrangement, which allows for both greater risk and greater financial reward. Under this model, health plans and/or employers continue to pay the ACO on a fee-for-service basis to fund the shared savings arrangement, with the potential for additional membership volume to eventually offset the fee reduction. The ACO must achieve a preset savings target before any savings are distributed.

The ACO, meanwhile, should be able to share up to predetermined percentage of the savings above a minimum rate if quality targets are achieved.

The American Journal of Accountable Care is a title of The American Journal of Managed Care devoted to research and commentary on healthcare reform, particularly regarding the transition away from fee-for-service models.

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