The Characteristics of Physician Practices Joining the Early ACOs: Looking Back to Look Forward

ABSTRACT

Objectives: To assess whether the characteristics and capabilities of individual practices intending to join the early Medicare accountable care organization (ACO) programs differed from those of practices not intending to join.

Study Design: Data from a 2012-2013 national survey of 1398 physician practices were linked to 2012 Medicare beneficiary claims data to examine differences between practices intending to join a Medicare ACO and practices not intending to join a Medicare ACO.

Methods: Differences were examined with regard to patient sociodemographic characteristics and disease burden, practice characteristics and capabilities, and cost and quality measures. Logistic regression was used to examine the differences.

Results: Practices intending to join were more likely to have better care management capabilities (odds ratio [OR], 1.72; P <.003), health information technology functionality (OR, 1.87; P <.001), and use of quality improvement methods (OR, 1.52; P <.04). They were also more likely to have had prior pay-for-performance experience (OR, 1.59; P <.02) and less likely to be physician-owned (OR, 0.51; P <.001). However, the practices with the greater capabilities still used half or less of them.

Conclusions: Physician practices that intended to join the early ACO programs had greater capabilities and experience to manage risk than those practices that decided not to join. The early ACO programs thus attracted the more capable physician practices, but those practices still fell short of implementing key recommended behaviors. The findings have implications for future physician practice selection into ACOs.

Am J Manag Care. 2018;24(10):469-474Takeaway Points

• Practices intending to join accountable care organizations (ACOs) in 2012 had greater capabilities than those not intending to join but implemented half or less of the capabilities. This may partially help explain the great variation found in ACO performance. The findings suggest the need for more careful targeting of practices in the future and greater investment in developing the capabilities of future practices to succeed in a value-based payment environment.
• Those practices intending to join were also more likely to be hospital-owned and have prior experience with pay-for-performance payment models.
• There were no differences in practice size or related variables.
• There were no differences in patient demographic characteristics or illness severity/disease burden or in baseline Medicare spending per beneficiary, ambulatory care–sensitive admission rates, or 30-day unplanned hospital readmissions.

A major response to the continued growth in healthcare costs and the highly varying quality of care in the United States has been the formation of accountable care organizations (ACOs). As of 2018, there are 1011 ACOs, with at least 1 located in every state, serving approximately 32 million people.¹ Enrollment has been projected to grow to 68 million by 2020.² Despite high hopes for savings, early research suggests only modest savings, albeit with no diminution of quality and, in fact, with increases on some quality measures.^3-8 Substantial variation in the performance of ACOs has also been noted.^9,10

There are a number of possible reasons that ACOs thus far appear to have achieved only modest savings. This paper’s contribution lies in using a unique national survey of physician practices to explore the possibility that there were differences in characteristics and capabilities between physician practices that intended to join the Medicare ACO programs in 2012 and those that did not. Presumably, those practices intending to join might have been larger, had greater access to resources, and believed they had greater ability to contain costs, achieve savings, and improve quality by doing a better job of managing patient care.

Taking a look back to the beginning of the ACO program is important for considering what may happen with the introduction of alternative payment models (APMs) and the Merit-based Incentive Payment System (MIPS) authorized to take effect in 2019 as part of the Medicare Access and CHIP Reauthorization Act. Practice leaders will need to assess their ability to take on financial risk and meet the challenge of performance metrics. Due to the importance of health information technology (HIT), care management processes (CMPs), and quality improvement (QI), we assess whether practices with strong capabilities in these areas were more or less likely to intend to join.^11-14 Such capabilities are markers of a practice’s ability to redesign care to meet quality goals and achieve shared savings. If practices without strong capabilities were the most likely to join, then the ability of ACOs to implement the necessary changes to drive higher-value care may have been limited, with implications for those that have joined more recently and those intending to join in the future.

STUDY DATA AND METHODS

We draw on a unique national survey of individual physician practices in 2012-2013 to identify those choosing to join the Medicare ACO programs versus those not choosing to join. We collected data on practice ownership, size, care management capabilities, HIT use, QI processes, and related variables. We linked these data to the Medicare claims files to examine baseline differences across practices in Medicare patient characteristics and illness severity/disease burden, focusing on high-cost/high-need patients’ spending, ambulatory care–sensitive admissions (ACSAs), and 30-day unplanned hospital readmissions.^15,16

Specifically, we used the IMS Healthcare Organizational Services Database to select a national sample of physician practices, with oversampling in 17 communities that participated in the Robert Wood Johnson Foundation Aligning Forces for Quality program. Veterans Health Administration practices and academic medical center practices were excluded. We focused on practices most likely to provide care for patients with chronic illnesses, including asthma, congestive heart failure, depression, and diabetes. These included general internal medicine, family medicine, general practice, cardiology, endocrinology, and pulmonology practices.

Survey Methods

Between January 2012 and November 2013, the physician or administrative practice leader completed a 40-minute telephone survey administered by RTI International. The survey instrument (eAppendix A [eAppendices available at ajmc.com]) was based on prior National Survey of Physician Organizations (NSPO) surveys. A total of 1398 practices responded, yielding an adjusted response rate of 50%.¹⁷ We restricted our analyses to the practices that included at least 15% primary care physicians (PCPs), which totaled 1040 practices. Of these, 235 (22.6%) practices intended to join a CMS ACO program. These data were then linked to the 2012 Medicare beneficiary claims data using the CMS method for assigning beneficiaries to ACOs (eAppendix B). A total of 868,213 beneficiaries were linked to surveyed practices; 311,116 beneficiaries were attributed to the physician practices intending to join the CMS ACO program. Beneficiaries were eligible if they were 65 years or older as of January 1, 2011; were not in the end-stage renal disease program; and were alive and enrolled in Medicare parts A and B throughout 2011 and 2012. The research protocol was approved by the Institutional Review Board of the University of California, Berkeley.

Outcome Variable

The dichotomous dependent variable was the practice’s intention to join an ACO in 2012. Specifically, respondents were asked if their organization applied to become an ACO during 2012. For our analysis, we constructed a 0/1 variable indicating those that responded affirmatively to this question.