The environment that breeds the formation of accountable care organizations (ACOs) includes large integrated hospital systems, primary care physicians (PCPs) practicing in large groups, and a greater fraction of hospital risk sharing, according to a Health Affairs report (http://content.healthaffairs.org/content/32/10/1781.abstract).
In other words, institutions and areas that have begun embracing risk-based or population-based payment models are more likely to spur the formation of ACOs, which have similar risk-reward payment structures.
For hospitalists, knowing the conditions that help foster ACOs may be an important first step in pushing for development and continued growth, says Ron Greeno, MD, FCCP, MHM, SHM Public Policy Committee chair and chief medical officer of Cogent HMG in Brentwood, Tenn.
It’s a shift in mindset for sure, says the report’s lead author.
“The traditional model is pretty much fill your beds with high-paying patients. An ACO is really a different kind of concept,” says David Auerbach, MS, PhD, of Boston-based RAND Corporation. “A hospital that doesn’t have any experience thinking in a different way is going to find it hard to accommodate the ACO payment model. But hospitals that do…probably have staff that have thought about this and already started to move down the path to thinking about ways to reduce their costs.”
Dr. Auerbach, a policy researcher and affiliate faculty member at Pardee RAND Graduate School, says further work needs to be done to identify “key regional factors” that induce certain physicians and hospitals to launch ACOs. His paper, “Accountable Care Organization Formation Is Associated with Integrated Systems but Not High Medical Spending,” found wide disparities in ACO formation; the model is popular in the Northeast and Midwest regions but scarcely found in the Northwest.
—Ron Greeno, MD, FCCP, MHM, SHM’s Public Policy Committee chair, chief medical officer, Cogent HMG, Brentwood, Tenn.
The authors reviewed 32 Medicare Pioneer ACOs, 116 Medicare Shared Savings Program ACOs, and 77 private-market entities very similar to ACOs. The study’s multiple-regression analysis found that in the 31 regions with at least 20% of Medicare fee-for-service beneficiaries in an ACO, more than half of hospitals had a joint venture with doctors or physician groups and were affiliated with a health system. In so-called “low-ACO areas,” that percentage hovered around 30% to 40%.
And while much of the policy discussion focuses on whether ACOs can rein in healthcare spending in some of the markets where care costs the most, the study reported “no strong pattern in the relationship between ACO penetration and Medicare spending or spending growth.”
Dr. Auerbach says that while the results of his paper did not surprise him, he hopes hospitalists and others use them educationally.
“We might think about there being demand from people in other areas that might say, ‘I want to be a part of that too. Why aren’t there any ACOs that I can be in?’” he adds. “And so a study like this says, ‘Here are some of the things that seem to be important.’ If there’s not this kind of infrastructure in your area, as a policy maker, you could go and say, ‘Let’s try and give a boost to some of these factors or proxies for these things.’”
Part of that review would include looking at those areas that saw higher rates of physician-institution consolidation and figuring out what the motivations were. Typically, the impetus of forming larger groups is partly explained by a desire to negotiate with insurers and get better deals, Dr. Auerbach says. But with more coordinated care comes a more efficient system that can offset those lower rates.