Study finds participation in ACOs growing, but not fast enough

March 25, 2014

When Berkeley researchers conducted a national survey of physician practices on their involvement in Accountable Care Organizations (ACOs), they discovered some good and bad news. 

“The good news is that practices that have currently joined ACOs appear to have the potential to provide greater value in regard to both cost and quality of care,” says School of Public Health professor and dean emeritus Stephen Shortell, coauthor of the report published online in the journal Health Services Research

The bad news? According to the study, about 60 percent of physician practices are not participating in ACOs, nor do they have any plans to join in the next year or more.

 “Our findings also suggest that those who are not joining ACOs have far less capacity to manage patients with chronic illness,” says Shortell, who was involved in developing the ACO concept.

Doctors and hospitals that participate in ACOs are rewarded and penalized based on quality of care provided and the costs their patients incur. Medicare accountable care efforts were launched in 2012 under the Affordable Care Act, and include the Medicare Shared Savings and Pioneer ACO programs. In January, the Medicare Shared Saving Accountable Care Organization Program reported that almost half of participating ACOs spent less money than expected. All together they generated $128 million in savings for the Medicare Trust Funds.  

If more physicians joined, the savings would increase, but Shortell says the majority of them are not yet prepared to provide the type of service that would make them succeed as ACOs. 

“They don’t yet have the care management capabilities to care for chronically ill patients that meet quality and cost criteria while still being able to be financially viable,” he says. These practices would need more capital, greater implementation of electronic health records, more time to build connections with other providers, and greater clinical and managerial leadership. Some of these capabilities may be provided through technical assistance, and having smaller physician practices partner with hospitals and larger medical groups or develop networks among themselves.

This study is the first from the School’s new Center for Health Care and Organizational and Innovation Research (CHOIR). The center conducts practice-based studies on health care delivery and organization in order to improve the efficiency and effectiveness of care. Ongoing CHOIR projects include research on innovations in primary care; state-wide innovations in care delivery to reduce the morbidity and mortality from diabetes, heart disease, and stroke (The Right Care Initiative); improving breast cancer related care from prevention through treatment; and studying patient activation and engagement in ACOs.

By Niema Jordan