Network and Leakage

An ACO is accountable for its patients’ total cost of care, but it directly controls only part of that care. Patients see specialists, land in hospitals, and go to post-acute facilities the ACO may not run. Managing that wider network, and the leakage out of it, is where a surprising share of ACO savings is won or lost.

Leakage: accountable but not in control

Leakage is attributed patients receiving care outside the ACO’s coordinated network of providers.

Worth remembering: leakage is uniquely frustrating because the ACO is accountable for the cost of that outside care without much influence over it. A patient who goes to a high-cost, low-efficiency specialist or hospital the ACO does not work with still counts against the ACO’s benchmark. Reducing leakage, keeping patients within a network of providers who share the ACO’s approach, is one of the quiet, high-value levers of ACO management.

The two networks that matter most

• Specialists. Specialists drive a large share of downstream cost through their referral, imaging, and procedure decisions. An ACO engages them by sharing data on their patterns, building relationships with efficient, high-quality specialists, and steering referrals toward them. Specialists are the most underused lever in many ACOs.
• Post-acute care. Where a discharged patient goes, home health, skilled nursing, inpatient rehab, and how long they stay, is among the most variable and discretionary spending in Medicare. Building a preferred post-acute network of efficient, high-quality facilities, and guiding patients toward it, is one of the most reliable savings strategies, exactly what the joint-replacement bundles in the case-studies course exploited.

The tools of network management

• Referral management: making it easy for the ACO’s clinicians to refer within a high-value network, and visible when they do not.
• Data feedback to providers: showing specialists and facilities their own cost and outcome patterns.
• Preferred networks: curating post-acute and specialist partners on efficiency and quality, without restricting patient choice unlawfully.
• Relationships: much of network management is the unglamorous work of building trust with the providers the ACO depends on but does not employ.

Key takeaways

• An ACO owns its patients’ total cost but controls only part of the care; the gap is where network management lives.
• Leakage, care outside the coordinated network, counts against the ACO with little ACO influence, so reducing it is high-value.
• Specialist engagement and preferred post-acute networks are among the most reliable ACO savings levers.