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The American Journal of Managed Care October 2019
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Jonathan L. Vandergrift, MS; and Bradley M. Gray, PhD
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Can Accountable Care Divert the Sources of Hospitalization?

Jangho Yoon, PhD; Lisa P. Oakley, PhD; Jeff Luck, PhD; and S. Marie Harvey, DrPH
Oregon’s Medicaid accountable care organizations led to reductions in preventable hospital admissions, especially unscheduled admissions, among female beneficiaries aged 15 to 44 years.

Objectives: To examine the impact of coordinated care organizations (CCOs), Oregon’s Medicaid accountable care organizations, on hospitalization by admission source among female Medicaid beneficiaries of reproductive age.

Study Design: We employed a difference-in-differences (DID) approach, capitalizing on the fact that CCO enrollment was generally mandatory whereas some Medicaid beneficiaries were exempt.

Methods: We used 2011-2013 Oregon Medicaid eligibility files linked to hospital discharge data and birth certificates. We constructed person-month panel data on 86,012 women aged 15 to 44 years (N = 2,705,543 observations) who were continuously enrolled in Oregon Medicaid. Outcomes included total and preventable hospital admissions. We also examined admissions separately by source, including scheduled and unscheduled admissions, as well as admissions through the emergency department. We estimated a fixed-effects multivariate DID model that compared a change in each outcome before and after CCO enrollment for CCO-enrolled Medicaid beneficiaries with a pre–post change for other Medicaid beneficiaries not enrolled in CCOs throughout the study period.

Results: Hospitalization rates decreased overall for female Medicaid beneficiaries enrolled in CCO and also for non-CCO enrollees, whereas the proportions of unscheduled and preventable admissions increased for both Medicaid subgroups. CCO enrollment was significantly associated with a decline of one-fourth from the pre-CCO average in the probability of all-source preventable hospitalization, largely due to a decline in unscheduled preventable admissions.

Conclusions: CCO led to reductions in hospital admissions, especially preventable admissions, among female Medicaid beneficiaries of reproductive age in Oregon. Findings, if replicated, may imply that the accountable care delivery model implemented in Oregon Medicaid promotes efficient resource utilization.

Am J Manag Care. 2019;25(10):e296-e303
Takeaway Points

Because access to adequate primary care can reduce hospitalizations for ambulatory care–sensitive conditions, delivery systems that incentivize primary care and better coordination among providers may prevent unscheduled, avoidable hospital admissions. Findings of this study show that:
  • Unscheduled hospital admissions have been growing fast in recent years among female Medicaid beneficiaries in Oregon.
  • Coordinated care organizations—an accountable care delivery model in Oregon Medicaid that offers incentives to coordinate care, emphasize primary care, and meet global budgets tied to quality improvement targets—led to reductions in preventable hospital admissions, especially unscheduled admissions, among female Medicaid beneficiaries aged 15 to 44 years.
Although it is well documented that hospital admissions represent the largest share (32.3%) of US healthcare expenditures1 and continue to grow every year,2 a rapidly changing mix of admission sources has received less attention. Between 2003 and 2009, scheduled (elective) admissions remained stable, whereas unscheduled (nonelective) admissions grew from 25.3 million to 26.7 million (a 5.3% increase), accounting for most of the growth in total admissions during that period.2 In particular, the emergency department (ED) has become the primary gateway to inpatient care. Hospital admissions originating from the ED increased by 50% between 1993 and 20063 and now account for approximately half of all admissions.4 This increase in ED-originated admissions offset declines in scheduled admissions from physician offices and clinics.2

Increasing rates of unscheduled admissions, especially through the ED, reflect inefficiency and fragmentation in the healthcare system.5 For example, some data suggest that the ED is increasingly becoming the venue for evaluation and treatment of complex patients with potentially serious problems.4,6 Other research has reported that primary care physicians who face difficulties in admitting their patients due to high occupancy often turn to the ED as a portal for unscheduled admissions.2,7 Because access to adequate primary care can reduce preventable hospitalizations for ambulatory care–sensitive conditions,8 delivery systems that incentivize primary care and better coordination among providers may prevent unscheduled, avoidable hospital admissions.

Oregon’s Medicaid program recently transformed its care delivery system to improve fiscal soundness and promote coordinated care,9,10 offering a unique opportunity to test a comprehensive accountable care model. The transformation is centered around 16 coordinated care organizations (CCOs), each of which is a geographically focused network of healthcare providers that receives a global budget to provide medical, mental health, and oral health care to assigned Medicaid enrollees.10 To ensure quality, CCOs must participate in a pay-for-performance program that rewards each CCO’s performance on 17 performance measures in multiple domains, including primary care, chronic disease management, prevention, and ED utilization.11

Eight CCOs began enrolling members in August 2012, and 7 more became operational by the end of that year; the last CCO began operation in 2013 (eAppendix Figure 1 [eAppendix available at]). More than 90% of Oregon Medicaid beneficiaries are now enrolled in CCOs and most are automatically assigned to the CCO covering their residential zip code.10 Some subgroups are exempt from CCO enrollment, including dual-eligible individuals, pregnant women in their third trimester at enrollment, individuals receiving medical home care services or living in areas not served by a CCO, and noncitizens eligible only for labor and delivery or emergency services.12

Several core characteristics of the CCO model could be particularly effective in reducing preventable hospitalizations. These features include mandatory enrollment in a geographically defined provider network; emphasis on patient-centered primary care homes; close monitoring of high-risk patients; care coordination; required integration of medical, behavioral, and dental health care; a global budget; and incentives for quality improvement and provider accountability.10 Aggregate data show that, during the 2013 post-CCO period compared with the 2011 baseline, there were decreases in all-cause hospital readmissions and ED utilization rates, as well as increases in primary care visits and enrollment in primary care homes.13 However, there is little evidence about the impact of CCOs on hospital admissions, and existing studies have reported inconsistent results. An analysis of Oregon Medicaid 2010-2014 claims data, using Colorado Medicaid as a comparison, found a statistically significant increase in inpatient days after CCO implementation in Oregon.14 In contrast, another study that analyzed the same Oregon Medicaid data but used Washington Medicaid as a comparison found the opposite result, reporting a significant decline in inpatient days after the CCO implementation.15 The inconsistency might be attributable not to CCOs but, rather, to other contemporaneous changes, such as nationwide decreases in Medicaid enrollees’ healthcare utilization or Medicaid program changes in the comparison states. Additionally, neither of these previous studies investigated the sources of hospital admissions.

The present study was conducted as part of a larger project that examines the impact of CCO implementation and Medicaid expansion on care utilization and the health outcomes of Oregon women of reproductive age (15-44 years). Specifically, we investigated whether CCOs led to changes in hospital admissions among female Medicaid beneficiaries aged 15 to 44 years. Using a unique data set that linked Oregon Medicaid, hospital discharge, and birth certificate data for 2011-2013, we examined changes in hospital admissions by source following the implementation of CCOs. We also examined preventable hospitalizations due to ambulatory care–sensitive conditions, as defined by the prevention quality indicators (PQIs) for hospital discharges.16


Data Sources and Study Population

Medicaid eligibility records retrieved from the Medicaid Management Information System included 251,113 women aged 15 to 44 years enrolled in Oregon Medicaid between 2011 and 2013. The Medicaid data were individually linked to Oregon hospital discharge data to obtain information on hospitalizations and admission sources, and they were augmented with pregnancy status from Oregon birth certificates. Rural–Urban Commuting Area (RUCA) codes were assigned using residential zip codes.17

We created a panel data set with up to 36-month observations per person. The main analytic sample included 2,705,543 observations on 86,012 women continuously enrolled in Medicaid, defined as being enrolled for at least 90% of the study period (ie, 986 days). Approximately 84% of that sample (71,967 women) were enrolled in CCOs during the study period.

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