Of the 32 ACOs participating in the Pioneer model, 13 produced shared savings with the government, generating gross savings of $87.6 million in 2012.
The ACOs earned over $76 million by providing the coordinated care called for under federal healthcare reform, according to the government report. Two had shared losses totaling about $4 million.
Savings were driven, in part, by reductions in hospital admissions and readmissions. Patient satisfaction measures also showed high ratings for ACOs.
Now, private insurers are ramping up their ACO efforts.
In July, the nations largest private healthcare insurer, UnitedHealth Group, Inc., announced that within five years it will more than double payments to physicians tied to ACOs.
The insurer said its ACO contracts have led to the increased use of less-costly generic prescription drugs, a higher survival rate for transplant patients, and fewer emergency room visits and days spent in the hospital for its clients.
The news is significant for the healthcare industry because UnitedHealth has ACO contracts with about 575 hospitals, more than 1,000 medical groups and 75,000 physicians around the country spending about one-fifth of its reimbursement expenditures, or about $20 billion, on ACO programs in 2012.
UnitedHealth, which began working on such value-based contracts in April 2010, said it expects to spend about $50 billion under ACO contracts by 2017.
Saavedra, the internist who launched PrimeHealth, said hes enthusiastic about the attention he now receives from insurers since announcing his intention to create an ACO. He says he has more leverage to negotiate rates with insurers, and push for the healthcare he feels his patients deserve.
But Saavedra is careful to note that ACOs are not a magic pill that will dramatically shift the balance of power in healthcare.
He just wants to practice medicine, he said, and feel good about helping patients lead healthy lives.
Were trying to find something where the parties involved all benefit, he said. Im not looking to punish anybody. I have no expectation of becoming wealthy beyond my wildest dreams. But I am looking forward to coming to work every day, and enjoying what I do.