Proposed ACO rules released yesterday by HHS project that up to 5 million Medicare beneficiaries will receive care from providers participating in ACOs, with savings from the program expected to be $510 million over three years from 2012 through 2014. HHS says many of the beneficiaries served by ACOs are expected to be located in high-cost areas of the nation, suggesting the ACO program “can have a significant impact on lowering Medicare expenditure growth.” (Note: the savings projections assume assignment of 1.4 million to 4 million beneficiaries to ACOs over the first three years).
In other words, up to 11% of the nation’s 45 million Medicare beneficiaries will be served by an ACO. In comparison, about 11 million — or 24% of total Medicare beneficiaries — are enrolled in a Medicare Advantage plan. I hate to break it to the health insurance industry, but a successful Medicare ACO program — i.e., one that lowers costs and improves quality – can only put additional pressure on Medicare plan profits and prospects. The chart below from HHS shows projected high-end, low-end and median savings from Medicare ACOs.