NCPA - National Center for Policy Analysis

Cost of Establishing Accountable Care Organizations Higher than Estimated

May 18, 2011

The American Hospital Association (AHA) released a study that looks at the start-up investment required to establish and sustain an Accountable Care Organization (ACO). 

  • The study found that the costs of the necessary elements to successfully manage the care of a defined population is considerably higher -- $11.6 to $26.1 million -- than the $1.8 million estimated by the Centers for Medicare & Medicaid Services in its proposed rule for start-up and one year of ongoing operations.
  • The information, gathered from four case studies, was used to create two hypothetical examples to estimate the start-up and ongoing costs of establishing an ACO.
  • The first represents a single free-standing hospital, 80 primary care physicians and 250 specialists.
  • The second example includes a five-hospital (1,200 bed) system, 250 primary care physicians and 500 specialists.

Source: "New Study Finds the Start Up Costs of Establishing an ACO to be Significant," American Hospital Association, May 13, 2011.

For text:

For study:


Browse more articles on Health Issues