Accountable Care Organizations (ACOs): An Update For Employers

August 7, 2014

Officially established under the Affordable Care Act in 2011, Accountable Care Organizations (ACOs) are becoming more popular with employers as a way to provide coordinated care for employees with chronic conditions while limiting unnecessary spending.

A recent article on ACOs in Employee Benefit News (EBN) reported that a growing number of large companies are “on board” with the notion that better coordination will lead to improved care for employees and lower costs for employers.

According to the 19th Annual Towers Watson/National Business Group on Health (NBGH) Employer Survey on Purchasing Value in Health Care, more than one in four employers expect growth in a variety of new methods providing quality care while mitigating costs, including ACOs. In fact, 28% of employers surveyed said it was likely that (employer-sponsored) care will be delivered through highly coordinated provider models such as ACOs or Patient Centered Medical Homes (PCMHs) over the next five years.

The EBN article noted, however, that some warn it’s too early to tell if ACOs will live up to their promise. Still, while use of ACOs is still in its early stages, more employers are considering ACOs as a valid method for evaluating vendors.

From the Towers Watson/NBGH survey, 81% of responding employers said, “Availability of ACOs and/or PCMHs with incentives and penalties to providers based on quality, efficiency and outcome” was an important or somewhat important factor in selecting a health plan vendor.

For previous posts on ACOs from the OneExchange Blog, see below:

Eighty-nine New ACOs Announced; Total Of 154 Now Serve Over 2.4 Million People

Nine Pioneer ACOs May Leave The Medicare Program

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