Hospitals Look for Ways to Fill in Lost Volume From ACOs

By Jill Brown - August 22, 2013 Hospitals are feeling pressure from large payers to develop accountable care organizations (ACOs) — but many struggle with the corresponding drops in hospital utilization and accompanying revenue. Although a few hospitals may see enough shared savings from ACO arrangements to offset some of the pain from reduced utilization, most still will take a hit. But a well-designed ACO can use education and the prospects for shared savings to encourage primary care physicians and specialists to admit patients to the ACO’s in-network hospital, and that could offset some or all of the decreased utilization. And hospitals will see reduced costs with reduced utilization, partly offsetting the negative impact. In addition, many health systems intend to use their ACOs to gain market share, “which can refill the beds emptied by lower use rates,” David Anderson, Ph.D., managing director of health care consulting firm BDC Advisors, L.L.C., tells AIS’s ACO Business News. Jordan Hospital, a 155-bed not-for-profit community hospital in Plymouth, Mass., definitely is feeling the pinch of decreased utilization. “Our occupancy rate is problematic,” says James Fanale, M.D., senior vice president of system development for the hospital. To manage it, Jordan’s ACO is looking for more deals with payers where the ACO can share savings on the upside, Fanale says. What do you think — will shared-savings ACO arrangements, increased market share and lower variable costs generate enough revenue for hospitals to offset lost utilization? http://aishealth.com/blog/health-plan-business/hospitals-look-ways-fill-lost-volume-acos?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=26518904