An in-depth analysis from the National Association of ACOs shows that accountable care organizations (ACOs) have been living up to their promise of lowering the cost of health care while providing high-quality care for patients. Since their creation under the Affordable Care Act, ACOs have saved Medicare $8.5 billion and $2.5 billion after accounting for shared savings payments, shared loss payments, and discounts to the Centers for Medicare and Medicaid Services (CMS).

As the Medicare trust fund is due to become insolvent in 2024 and as nearly 20% of all spending in this country is on health care, ACOs are an important way to control spending and incentivize providers to care about keeping their patients healthy in the long-term. An ACO is a group of health care providers who work to coordinate care for patients and have the potential to improve care delivery and reduce costs. Provider reimbursement is tied to quality measures and reductions in the cost of care.

As relatively new Medicare programs, it took ACOs a few years to hit their stride and reach these levels of savings. Today, there are several ACO models, including the Medicare Shared Savings Program, Medicare’s largest value-based care program, and the Next Generation ACO Model, the Center for Medicare & Medicaid Innovation program comprising some of the leading ACOs in the country. In 2019, 582 ACOs in the two programs cared for 12.2 million patients, comprising 20% of all Medicare patients and nearly a third of traditional Medicare patients.

NAACOS anticipates the savings to the U.S. health care system and the Medicare program, in particular, will continue to grow as ACOs gain experience. According to the study, 80% of ACOs who started in 2012 or 2013 earned shared savings in 2019, compared to 38% of ACOs who started in 2018 and 2019. “This illustrates the long-term commitment required by ACOs and that success doesn’t happen overnight, but take years of hard work,” said NAACOS President and CEO Clif Gaus.

To ensure that ACOs maintain their ongoing success, NAACOs says it will be important to:

  • Set a national goal to have a majority of traditional Medicare beneficiaries in an ACO by 2025;
  • Deprioritize the rush to risk and build a population health infrastructure;
  • Address overlap of competing payment models to prioritize total-cost-of-care models;
  • Strengthen incentives to attract new ACOs and retain existing ones;
  • Provide meaningful funding to build infrastructure necessary to spur innovation and value through expanded advanced payments and grants;
  • Adapt ACO and alternative payment model methodologies to account for COVID-19 anomalies.

View the full study on NAACOS’s website.

NAACOS is a partner in the Going Below The Surface Forum.