The ACO Conundrum
Safety-Net Hospitals in the Era of Accountable Care
Serving a similar disenfranchised population, safety net hospitals can be a natural fit with health centers seeking the improve the health care system. This paper provides a unique perspective from safety net hospitals facing the conundrum of adding value to the health care system with the ACO model while taking losses for reducing inpatient days, emergency room visits, and imaging services. Funded by the Robert Wood Johnson Foundation, this paper drafted by John Snow, Inc. and Bailit Health, discusses the role health centers have played for safety net hospitals navigating accountable care development efforts. The paper highlights efforts from four safety net hospital systems: AltaMed Health Care Services in Los Angeles, CA; Baystate Health in Springfield, MA; Commonwealth Care Alliance in Boston, MA; and Hennepin Health in Minneapolis, MN.
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Link to the original ACO Conundrum documentThe following conundrum emerged as a significant challenge: if the promise of ACOs proves successful, the result will be reduced hospital revenues resulting primarily from the reduction of inpatient days, emergency department utilization, and technical fees associated with imaging and outpatient procedures. This prospect leaves hospitals, especially those already operating on low Medicaid reimbursement rates and decreasing Disproportionate Share Hospital (DSH) funds, facing a future where fewer
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