Why hospital associations are dipping their toes into state-based Medicare ACOs

In an effort to build scale and drive greater savings, providers in some regions are banding together in statewide Medicare accountable care organizations (ACOs).

Hospital associations in Mississippi and Florida have teamed up with Caravan Health, a company that builds ACOs, to make this a reality. Mississippi’s ACO, the first such statewide Medicare ACO in the country, launched in January. Florida’s launched this week.

Caravan Health CEO Lynn Barr told FierceHealthcare that ACOs should include upward of 100,000 participants to produce typical savings goals of between 1% and 2%. However, most organizations, about 85%, have 25,000 or fewer participants.

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