ACO Incentives for Rural Participants Unconvincing

Alexandra Wilson Pecci, for HealthLeaders Media , June 1, 2011

"We have maybe 1,000 Medicare people that we deal with in our health district, and an ACO would be nonsense based upon that many people," he says. "We don't have the numbers in small, rural communities that you get in large rural communities or in urban areas. As a result, you don't have the volumes that are necessary to make it work out well."

Being a part of a larger entity's ACO is likely the only way that Tiller's organization would likely consider participating in the program, he says, but he's doubtful that would occur.

Webcast: Alternative ACO Strategies: June 7, 2011, 1:00–2:30 pm (ET) Register today.

"If they were to reach out and say, 'be part of our ACO,' we might do that, but boy, I just don't see that happening, either. I think they're going to have their hands full," he says.

Wathen acknowledges that a "network of proper providers in a small rural community can probably do some things that would move the population toward a better level of health," as well as potentially reduce the cost of care. But he adds that he doesn't think bundled revenues or capitation would be beneficial to the rural organizations involved, "regardless of what kind of breaks they might give people."

"It's pretty clear that the smaller you are, the harder it is to spread your costs over the area or the people that you serve," he says.

Alexandra Wilson Pecci is a managing editor for HealthLeaders Media.

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