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Medicare ACOs are designed to slow growth in Medicare spending and improve the quality of care delivery. Since the first ACOs were established in 2012, there has been a persistent question of whether the population health management and wellness measures employed by ACOs will result in fewer inpatient stays and lower hospital revenue. Can ACO participation be worth the financial risk for inpatient hospitals?
Ultimately, no hospitals would be willing to join an ACO if lower revenue put the financial future of the hospital at risk. They just can’t gamble with their own financial health, which could lead to closure or consolidation. The Medicare Payment Advisory Commission (MedPAC), in its recent report to the Congress, put some of these concerns to rest.