ACOs may need stronger financial incentives, like downside risk, to succeed

Accountable care organizations that take on financial risk are more likely to be bigger, horizontally and vertically integrated, to have been exposed to other types of payment reform and have more ACO contracts across variable payer types, a new study finds.
The report in Health Affairs’ July issue also found the proportion of ACOs taking on downside risk has remained relatively stable over the past six years. Among ACOs formed in 2012, 28% initially had at least one contract with downside risk. By 2018, that figure had grown to only 33%.
The “modest” increase in the proportion of ACOs with a downside risk contract between 2012 and 2018, taken in tandem with the fact that the number of ACOs has multiplied five times since 2012, could indicate that the actual number of organizations with a downside risk contract could have also grown substantially over the time period, researchers said.