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June 19, 2014

Accountable Care Update: Top ACO Providers

Accountable Care Organizations (ACOs) have proliferated throughout the United States in the past few years, but they are still a comparatively new model for delivering low-cost, high quality care. We have welcomed new reports that offer insight into the emerging ACO marketplace. SK&A, A Cegedim Company, the leading healthcare data and research resource, recently provided a list of the top ACOs ranked by total participating physicians within the ACO. This report is useful for healthcare providers as well as pharmaceutical and device companies who now have large coordinated care organizations as clients and must understand ACO trends.


An ACO is a collaboration of doctors and hospitals that share the responsibility for providing coordinated care to patients in order to limit unnecessary spending. ACOs are intended to foster greater accountability in traditional fee-for-service programs by rewarding participating healthcare provider groups that realize the two hallmarks of healthcare reform: slower spending growth and higher-quality care. Under the Affordable Care Act, groups that save Medicare money while also meeting certain quality targets are entitled to "share" a portion of the savings.

Across the country, large hospital systems are buying up physician practices with the goal of becoming ACOs that directly employ the majority of their providers. Because hospitals usually have access to capital, they are better able to finance the initial investment necessary to achieve the quality benchmarks, like creating the electronic record system in order to track patients.

Private commercial payers, such as Cigna, Humana, and United Healthcare, are also forming their own ACOs for the private market. Private sector ACOs often mimic the shared savings model of the MSSP, but others have moved to full or partial capitation models, bundled payments, retainer agreements, in-kind services and subsidies provided by payers, and pay-for-performance incentives.

An increasing number of states have approved and are implementing accountable care models for their Medicaid programs. As of mid-2013, there were over 4 million beneficiaries covered by Medicare ACOs.

Top 30 Accountable Care Organizations

Through extensive telephone interviews and custom research methods, SK&A identified 537 ACOs, including profiles for directors, administrators, committee voting members, and other personnel. This number is in line with our recent article showing the number of ACOs is on a definite upward swing, especially in the last year.

SK&A's report also found that the number of physicians, nurse practitioners, and physician assistants participating in ACOs exceeds 190,000. Currently, there are nearly 289,000 total healthcare providers and business personnel aligned with ACOs.

The chart above shows that the vast majority of the top ACOs are either a Pioneer ACO—one of the 32 early adopters of the ACO model—or a commercial ACO. In looking at the top few players, Partners Healthcare, a Pioneer ACO based in Boston, has the most participating physicians at 3,727. Valley Preferred Aetna is second with 3,533 physicians, but notably has almost half the total facilities as Partners Healthcare, and less than a third the facilities as Heritage California ACO, fourth on the list for total physicians.

What's interesting is that in our last article we noted the northeast, Florida, and California appeared to have the most total ACOs. With the exception of Partners Healthcare and Valley Preferred Aetna, however, the northeast and Florida are home to a very small portion of the top thirty list. Most of the largest ACOs in both physician and facility number are scattered all across the country. Currently, California has eight of the top 30 ACOs.


Pharmaceutical and device manufacturers have a great stake in the shifting healthcare model. Obviously, when medications and devices are appropriately used, they can contribute significantly to improving patient outcomes and reducing overall costs. This is an important message for companies to be able to convey.

As ACOs expand, individual providers have significantly less decision making power and influence. Companies need to seek out and engage the right decision makers in the new quality-driven environment. Manufacturers that operate in multiple regions also must identify territories that are dominated by ACOs versus markets that comprise mainly independently owned entities. These reports offer important tools to help companies stay well-informed of the ACO trends. Thank you to Cegedim for their insight.

It will be interesting to follow the trends in ACO numbers to see whether the biggest ACOs continue to expand, or whether a large number of smaller ACOs continue to crop up.

Fifth Annual ACO Summit

Keeping up with regulatory changes and "best practices" in this area is beneficial now that we have more evidence on what is working for various ACOs. The Fifth Annual ACO Summit will highlight some of the most pressing considerations for providers, payers, policymakers, and supporting partners in effectively implementing accountable care. This conference takes place June 18-20, 2014.


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