ACOs might not be profitable off the bat

An article in the March 23 New England Journal of Medicine suggests that accountable care organizations (ACOs) may lose money during the first three years. After three years, more than half of the participants in the recent Physician Group Practice (PGP) Demonstration of the Centers for Medicare & Medicaid Services (CMS) were not eligible to receive bonus payments and were unable to break even on their initial investment. “According to our analysis of the data from the PGP Demonstration, an ACO making the mean initial investment of $1.7 million will require the unlikely margin of 20% for the 3-year period envisioned by CMS,” states the report.