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Regional 'Super-ACOs' May Relieve Small ACO Risk Problem

By Philip Betbeze  
   May 17, 2018

Minimum patient thresholds and high investment levels can be hurdles for most regional health systems to participate in ACOs, but a new collaborative ACO could overcome those challenges.

Managing an ACO is tough.

Even in Medicare Shared Savings ACOs with no downside risk, providers who follow care protocols, ensure patients have yearly wellness visits, and effectively manage metrics to decrease spending on Medicare beneficiaries may learn that their ACO didn't meet benchmarks, and they don't qualify for a shared savings check.

Frustratingly, the reverse is also true.

Those who joined the program and made no substantive changes managing their patients sometimes meet targets and get the check.

What gives?

Small ACOs, huge risk

In large part, says Rachelle Schultz, president and CEO of Winona (Minnesota) Health, it's because of the variable risk component for ACOs with relatively small numbers of attributed lives.

Winona Health's current ACO, even with five rural partners around the state, consists of about 12,000 people.

"The data over the past few years suggests the size that's needed is in the 100,000 range," Schultz says. "[The ACO] is something we all want to continue and even though it's not the end-all and be-all, it's the right pathway to transformation, and at least moves that work forward in the most positive way and removes that risk component."

Winona Health is forming a new, larger, collaborative ACO with other health systems using the administrative services and regulatory expertise of Caravan Health.

Philip Betbeze is the senior leadership editor at HealthLeaders.

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