This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Accountable Care Organizations Serve Nearly 10 Percent Of Americans, Are Poised To Present Competitive Challenge To Traditional Medicine

Stocks in this article: MMC

Almost 10 percent of U.S. patients receive their healthcare from an accountable care organization (ACO), and almost half live in areas served by at least one ACO, according to a new study from Oliver Wyman. This means that ACOs, little known in the United States as recently as two years ago, now have a substantial presence and are poised to offer a competitive threat to traditional fee-for-service medicine.

“There’s a common impression that ACOs play a minuscule role in American healthcare,” says Niyum Gandhi, one of the authors of the study. “But when you go out and actually count what’s on the ground, you realize that they’re already achieving critical mass.”

There is no single, universal definition for ACOs. In its census, Oliver Wyman counted not just participants in Medicare’s various ACO programs, but also commercial ACOs and healthcare delivery organizations that apply some other name to themselves but follow the basic elements of the accountable care organization: They are healthcare providers that take responsibility for the full healthcare needs of a defined population, receiving savings payments based on cost savings and quality.

The ACA directed Medicare to create ACO programs – today there are 150 Medicare ACOs, and the number is expected to more than double in January, when Medicare announces the next class of participants in its Shared Savings Program. Because it is difficult to operate a single organization under a fee-for-service and an ACO model at the same time, most participants in Medicare ACO programs eventually shift their non-Medicare patients to ACO models as well.

A total of 25 to 31 million U.S. patients currently receive their care through ACOs. They include:

  • 2.4 million patients in Medicare ACO programs
  • 15 million non-Medicare patients in Medicare-oriented ACOs
  • 8 to 14 million patients in non-Medicare ACOs

Because Medicare’s ACO programs were designed to create a care delivery model that could compete with fee-for-service, the Oliver Wyman study analyzed how many people lived in a locale served by at least one ACO. The astonishing answer: 45 percent of Americans. And there are 19 states in which more than half of the population live in an area served by at least one ACO.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,302.41 +111.04 0.65%
S&P 500 2,005.15 +2.99 0.15%
NASDAQ 4,634.2730 -3.7210 -0.08%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs