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Can Medicare ACOs Learn from Commercial ACOs?

October 13, 2016
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A Commonwealth Fund-sponsored analysis of ACO development is offering fascinating insights

It was fascinating to thoroughly read a new analysis from the Commonwealth Fund, which, as this publication reported last week, examined the results of a Commonwealth Fund-supported study published in the October issue of Health Affairs and authored by researchers from Harvard University, the University of California-Berkeley, Dartmouth College, and elsewhere, which looked at data from national surveys of 399 accountable care organizations (ACOs), examining differences between the 228 commercial ACOs studied, and the 171 non-commercial (Medicare or Medicaid) ACOs studied.

The Commonwealth Fund analysis, by David Peiris, Madeleine Phipps-Taylor, Stephen M. Shortell, Valerie Lewis, Merdeith B. Rosenthal, Carrie H. Colla, Courtney A. Stachowski, and Lee-Sien Kao, and written by Brian Schilling, began with a synopsis that reads, “Online survey data show that accountable care organizations (ACOs) with commercial contracts outperform ACOs with public-payer contracts on selected measures of quality and process efficiency. These differences in performance are linked to variation in organizational structure, provider compensation, quality improvement activities, and management systems. The public sector can and should play a lead role in supporting and guiding the future growth of ACOs to ensure that desired quality and efficiency gains are realized.”

As the Commonwealth Fund analysis authors note, “The past four years have seen rapid growth in the number of ACOs, as various groups rush to promote or adapt to this new, risk-based payment model. Today, more than 800 ACOs cover an estimated 28 million Americans, a figure that some expect to quadruple over the next five years. While large, more mature commercial ACOs tend to score higher on quality measures and have more processes in place to improve efficiency than their noncommercial counterparts do, few ACOs of any variety report having rigorous quality monitoring processes or substantial financial incentives tied to quality. To ensure the rapid embrace of this promising model leads to desired improvements in healthcare quality and efficiency,” the analysis’s authors state, “ACO leaders and policymakers will need to focus on critical success factors such as organizational structure, health IT, physician engagement and incentives, and quality improvement.”

Now for a few fascinating drill-down results:

Ø  Commercial ACOs are far more likely—41 percent versus 19 percent—to be include one or more hospitals, and to be jointly led by physicians and hospitals (60 percent versus 47 percent). Commercial ACOs also had lower expenses per Medicare enrollee--$10,000 versus $12,000—and slightly higher overall quality-of-care scores.

Ø  Commercial ACOs tended to be more active in tying physician compensation to quality incentives, though overall, only half of ACOs reported even monitoring financial performance at the physician level. Commercial ACOs were also more likely to tie specialists’ compensation to quality metrics.

Ø  Overall, quality improvement activities were seen by the analysts as being modest across the board. Even among the commercial cohort, only 60 percent of those ACOs provide clinical-level performance feedback or use patient satisfaction data for quality improvement, while only 30 percent reported having well-established chronic care programs.

Ø  When it comes to IT, analysts found that just over 30 percent of commercial ACOs uses a single electronic health record (EHR) system, while fewer than 20 percent of non-commercial ACOs do so. And few ACOs of either type reported “being able to effectively integrate patient information between providers.”

As the Commonwealth Fund-supported analysis noted, “Both noncommercial and commercial ACOs need to make major investments in critical infrastructure if they are to support delivery system reform, the study’s authors say. “In particular, this his would entail coordinating quality improvement activities and related financial incentives for physicians. At the same time,” they add, the Health Affairs article noted that “the immature state of most ACOs’ information technology platforms may substantially complicate such efforts.”

So what can we take from all of this? A number of things. To begin with, it’s interesting that the researchers who have done the analysis for the Commonwealth Fund found that, while all ACOs have a long way to go in terms of broad elements such as tying physician performance to clinical and financial outcomes, providing physicians with clinical outcomes feedback, providing physicians with financial outcomes feedback, or creating unified clinical information systems (including EHRs) across their networks, they also found that commercial ACOs were ahead of publicly sponsored ACOs in some of these areas.

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