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Analyzing Trends in Accountable Care Organizations: A Nationwide Survey
Michael R. Page, PharmD, RPh

Analyzing Trends in Accountable Care Organizations: A Nationwide Survey

Michael R. Page, PharmD, RPh
Accountable Care Organizations: A Growing Trend
Fisher and colleagues at Dartmouth Medical School are generally credited with stimulating the development of accountable care organizations (ACOs). These organizations are comprised of health systems that offer incentives for performance and quality improvement. Through application of the principle of payment for performance, rather than payment for discrete services, ACOs seek to improve the quality of care for patients while reducing costs. Although the proliferation of ACOs represents an important shift, these systems bring together multiple existing mechanisms of performance improvement. In fact, in their 2007 paper, Fisher and colleagues acknowledged that, in their conception of ACOs, they were building on ideas explored by other investigators over a period of more than a decade prior to that time.1

ACOs help address the quality improvement goals of the Triple Aim, which were described by Berwick and colleagues from the Institute of Healthcare Improvement. In a seminal article, Berwick and colleagues argued that reform of the US healthcare system requires simultaneous pursuit of improving the overall care experience, improving population health, and reducing the cost of care for populations on a per-capita level. This is the so-called Triple Aim concept. These authors suggest that 3 inescapable design constraints underlie effective accomplishment of the Triple Aim: 1) recognition of the unit of concern as a patient population; 2) policy constraints in a given organization, such as budgetary limitations, or a requirement for equitable treatment of all patient subgroups; and 3) existence of a single authority, or integrator, that coordinates services, enabling implementation of all 3 aspects of the Triple Aim simultaneously. One method of implementation would be establishment of a registry to track patient subgroups longitudinally, over time.2

When ACOs were first envisioned, patient registries were rare, and the precursors of the ACO in the United States were largely limited to integrated delivery networks (IDNs), including large health systems with multiple specialties, such as Kaiser Permanente, Mayo Clinic, and Geisinger Health System, as well as public bodies such as the Veterans Health Administration. Additional efforts to reform healthcare led to implementation of the Patient Protection and Affordable Care Act in 2010, which mandated implementation of ACOs and IDNs within Medicare, through the Medicare Shared Savings Program. As defined by the US Congressional Research Service, ACOs have several key characteristics, including3:
Integrating the activities of many different providers and provider types across a broad range of settings
Emphasizing optimal use of primary care services
Helping payers achieve savings through integration of care across providers
Generating savings, which are shared with providers in the form of incentives
Generating savings by the use of efficiencies, which do not reduce the quality of services provided
Acceptance that improved quality and reduced costs are ultimately the responsibility of providers
Measuring improvements in outcomes across defined populations
Growth of ACOs
Organizations that were early adopters of the ACO model commonly operated under either the Centers for Medicare & Medicaid Services (CMS) Medicare Shared Savings Program (MSSP) or the Pioneer ACO Program. More recently, the number of ACOs in the private market has grown substantially.4

As illustrated in Figure 1,5 the number of US ACOs has grown from 64 in early 2011 to 838 in 2016, according to a recent analysis by Muhlestein and McClellan.5 However, another study, based on proprietary data for ACO market activity between 2011 and 2012 by the Optum Institute, reported the markedly higher total of ACOs in 2012, totaling 1028, of which 594 were private and 434 were public.6 As of 2017, just the ACOs that conformed to the CMS MSSP totaled 480, with 9 million beneficiaries across the United States.7
Financial Risk Levels for Providers
The central issues with the traditional fee-for-service system for healthcare delivery and reimbursement in the United States are the lack of cost control and the lack of incentivization of care quality.8 National attempts to reform healthcare have led to the development of alternative payment models, of which the ACO is a model example. The key elements in setting up an ACO, as summarized in the first section, include the critical requirement that each provider is responsible for improving quality and reducing costs.3

There are varying degrees of financial risk for an ACO depending on its structure and contract. ACO contracts range from shared savings to full capitation models. The financial obligations in the contract correspondingly vary from upside-risk only, through varying degrees of shared risk, to a full upside and downside risk in the case of full capitation reimbursement models.8

Some of the most successful ACOs have been in defined specialties, such as orthopedic surgery, end-stage renal disease services, and comprehensive oncology care. In part, this is because institutions with fully integrated systems that can provide the necessary comprehensive services already have a good understanding of the patient population and the financial obligations in providing for their total care.

For example, a study by Kantar Health conducted in the first quarter of 2016 explored aspects of both business models and delivery of care in the dynamic US oncology care environment. Kantar Health surveyed 150 independent community-based and 80 hospital-owned or hospital-affiliated oncology practices to examine the increasing role of IDNs in cancer care. In particular, the mode of care delivery in an IDN might differ from the mode of care delivered through independent community practice.9

The Kantar Health study found that 2 years prior to the study, 35% of independent community oncology practices reported some form of business association with another entity, with the majority of these associations being with hospitals or IDNs. The report concluded that relationships between community oncology practices and IDNs had resulted in an increasingly large share of patients with cancer receiving treatment in an IDN setting. Furthermore, Kantar predicted that this trend would continue, given economic incentives, the increasing popularity of integrated care delivery models, the growth in IDN investments in oncology technologies, and a trend toward greater oncologist receptivity to working within an IDN model of care delivery.9

With respect to the role of pharmacy services in ACOs, Colla and colleagues reported a study using data from 2 waves of the National Survey of ACOs (n = 270), completed by eligible ACOs that were established prior to July 2013. The respondents (ACO executives or director-level administrators) were asked about ACO engagement of pharmacy services, pharmacy-related health information technology capabilities, and ACO accountability for prescription drug spending. The survey’s questions regarded the distinct services included in the calculation of total cost for which the ACO is responsible, including prescription drugs.10

Health information technology capabilities necessary to manage prescription drug costs and quality were mixed, among ACOs surveyed. Almost half of ACOs (45%) reported having implemented e-prescribing systems and systems for confirmation of whether or not prescriptions were filled. Additionally, the majority (54%) maintained active medication lists within electronic health record systems for each beneficiary. It was notable, however, that just a small minority (10%) of ACOs reported having achieved, or nearly achieved, the capability of integrating inpatient and outpatient data, including information related to patient medication use. Especially challenging was the integration of data from providers practicing outside of the ACO.10

The authors noted that pharmacy benefits have important implications for managing quality of care and minimizing costs. To optimize care, and minimize prescription costs, Colla and colleagues noted that utilization of clinical pharmacists, medication coaches, and use of technologies to track adherence might further improve clinical outcomes for patients.10

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