Does 'ACO' Stand for 'A Cash-flow Obstacle'?

Sultan estimates that nearly 80 percent of the 350 payers with which Trizetto works are sponsoring what they deem as ACO arrangements. But he decries how inexact the term has become, contending that to be truly "accountable" providers must face some financial consequence as part of the ACO contract. And for now, the majority of ACO contracts-including Medicare's shared savings efforts-are predominately "upside only." That means providers stand to gain financially if they meet quality thresholds and beat projected expense outlays for a given population, but face no penalty if they don't. "Providers like this model, because they think they can succeed at it and payers like it because they think it will be easier to administer," he says. The problem, Sultan says, is both providers and payers underestimate the requirements of succeeding. "Many providers don't have the technology to support management of risk and they will fail" to contain the total cost of care, he says. And payers don't appreciate the complexity of making total cost of care calculations, he adds.

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