After three years, experts disagree whether ACOs are working

Healthcare experts disagree on whether accountable care organizations, now in their third year, are working, according to a new report from Kaiser Health News.

Accountable care organizations have failed to save Medicare money but improved outcomes for patients, experts said. ACOs generated more than $411 million in savings in 2014, but bonuses paid out to providers left Medicare with a $2.6 million net loss, according to the Centers for Medicare & Medicaid Services said.

Some experts polled by Kaiser believe ACOs are off to a slow start, but positive outcomes indicate they will work in the long run. Others pointed to the program's design flaws, saying ACOs won't be successful unless the deficiencies are corrected. Robert Murray, president of consulting firm Global Health Payment, said ACOs would most benefit from a new model centered around groups of primary care physicians, instead of large health systems and hospital networks.

“For hospitals, which have high levels of fixed costs, the way to cover costs and earn profits is to generate more volume,” Murray said. “The ACO model for these groups is akin to asking an overweight patient to eat his or her own flesh to become thinner.”

Growth in the ACO model, and the number of Medicare beneficiaries served by ACOs, should serve as signs that the program will become more successful over time, CMS' Deputy Administrator and Director Sean Cavanaugh told Kaiser.