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ACOs: $4 million needed in start-up costs first 2 years

The National Association of ACOs has published the results of a survey of accountable care organizations (ACOs) that provides data on the start-up costs of 35 ACOs. The average first year start-up cost was found to be $2 million, with a range of $300,000 to $6.7 million.  Some start-up costs were excluded–such as feasibility studies, legal costs, and other pre-contract costs. Because of the lag time before any potential savings begin to flow back to the ACOs, the Association estimates that $4 million in start-up capital is actually needed, on average, to get through the first 24 months.  The survey also looked at estimates of the likely first-year savings prospects.

The most frequently mentioned operational problems encountered during the first year of ACO start-up were issues related to learning how to access and process data from the Center for Medicare & Medicaid Services (CMS).  Also included in this survey were questions related to information technology spending of ACOs.

Source: National Association of ACOs.  National ACO Survey, Jan. 21, 2014.  Click here: https://www.naacos.com/pdf/ACOSurveyFinal012114.pdf  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

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