Why Half of All Healthcare CEOs Don't Want to Be in an ACO

Philip Betbeze, for HealthLeaders Media , January 10, 2014

In general, accountable care organization models are thought to carry too many variables and financial risks. Executives at smaller organizations balk because they see no structural model surrounding participation in ACOs that seems replicable.

Nearly half of hospital and health system executives have no plans to implement an accountable care organization or ACO-like model in the near future. Instead, they're waiting for ACOs to become more stable and secure.

If and when that happens, it may be too late.

Specifically, hospital executives find ACO models to be unstable and financially risky. That's one reason 46% of hospital chief executives in a recent survey reported no plans to participate in an ACO or ACO-like model in the near future.

The survey, conducted in October 2013 by Purdue Healthcare Advisors, a nonprofit consulting firm, showed that CEOs feel that either their hospital or healthcare organization is too small for an ACO-like structure (49%) or that there are too many unknowns and inconsistencies surrounding the models to take the risk of participating (52%).

Financial concerns, not surprisingly, surround the chief reasons top executives are unwilling to consider bringing the ACO model to their organizations.

Many Unknowns
According to executives with PHA, the survey results confirmed what they had been hearing anecdotally from CEOs with whom they have consulting relationships. "There are all these unknowns as far as the model, reimbursement, what's the right mix of services in inpatient and outpatient and population health and how you pull all that together and remain fiscally viable," says Mary Anne Sloan, director of PHA.

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