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All about the C students

April 29th, 2011

By jeremy.engdahl-johnson

Modern Healthcare looks at the financial risks facing potential accountable care organizations (ACOs). Here is an excerpt:

The highest performers may not achieve the most savings, warned actuary firm Milliman in a separate report. Providers will need to conduct risk analyses before signing on to Medicare’s shared savings program, according to Milliman. For instance, high-performing systems may not be able to produce sufficient savings. “It will be easier for the inefficient systems to beat their targets,” according to the report.

For instance, “ACOs operating with low inpatient utilization and low cost will need to work hard on non-inpatient services to achieve significant savings,” according to Milliman. In conclusion, Milliman actuaries said the proposed rule offers “much less upside to ACO ‘A’ students who operate in very efficient systems than to ACO ‘C’ students who operate in systems with a lot of inefficiencies.”

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