This page is optimized for a taller screen. Please rotate your device or increase the size of your browser window.

ACO Investment Model Produced Savings, But The Majority Of Participants Exited When Faced With Downside Risk

Matthew J. Trombley and Betty Fout, Abt Global; J. Michael McWilliams, Harvard Medical School and Brigham and Women’s Hospital; Brant Morefield, Aledade, Inc.


January 5, 2022

This study by Abt Global and partners published in Health Affairs found that a program to support rural healthcare providers resulted in $381.5 million in net savings for Medicare. The savings accrued over three years, primarily driven by decreases in hospitalizations and other institutional care services. This study expands on the findings from the evaluation of the Accountable Care Organization (ACO) Investment Model (AIM) to improve health care delivery in rural and underserved areas while maintaining quality care for patients.

Overall, AIM had mixed success. On the one hand, reductions in total Medicare spending were substantial and greater than an earlier, similar model. On the other hand, the up-front investments in AIM were not sufficient to maintain participation in the face of downside risk, even if they succeeded in encouraging ACO participation in more rural and underserved markets.

The findings suggest policy makers may find it advantageous to allow rural providers in the ACO transformation track to pursue a slower path to taking on downside risk to promote sustained participation. This may yield greater long-term savings to Medicare.