Medicare ACOs may have difficulty lowering costs and improving care quality because beneficiaries have unrestricted choice of health care providers and often receive fragmented care, according to a new study in JAMA Internal Medicine.
The study, led by Harvard Medical School researcher J. Michael McWilliams, examined Medicare claims and physician rosters for 2010 and 2011, the two years before the launch of the Affordable Care Act's (ACA) Medicare ACOs. Under the ACO program, hospitals and doctors may earn bonuses or suffer losses depending on how well they meet quality targets and control spending for patients under their care. Currently, about 360 ACOs serve a combined 5.3 million beneficiaries, which accounts for about 12% of the entire program.
For the study, McWilliams and colleagues used data from 525,000 beneficiaries across 145 provider groups to see how often patients sought care insider the future ACO networks. (In essence, the study imagines that the ACOs were in place two years earlier than they actually were.)
How are Medicare ACOs faring?
The researchers found that about 80% of beneficiaries would have received the bulk of their treatment from the same providers within the "ACO" over the two-year study period.
However, beneficiaries were more likely to stick with the same primary care providers than the same specialists. Only 8.7% of beneficiaries sought out primary care from outside the "ACO" network, while two-thirds of office visits with specialists were provided outside of the "ACO." Even in "ACOs" with a large number of specialists, patients still went out-of-network for 54.6% of specialty visits.
Additionally, high-risk patients with chronic conditions—who would likely benefit the most from highly coordinated care—were the most likely to obtain care outside the ACO network. Medicare patients within the ACO accounted for the minority (38%) of outpatient medical bills for in-network providers.
The study suggests that allowing patients free reign to choose their providers could "weaken...incentives and undermine ACO efforts to manage care." Moreover, "leakage of outpatient specialty care, particularly among high-cost and medically complex patients, could pose a significant care coordination challenge to ACOs and substantially limit their ability to" improve outcomes and control costs.
Why ACOs will fail—but how delivery reform can succeed
In an accompanying commentary, Paul Ginsburg, from the Sol Price School of Public Policy at the University of Southern California, pointed out that, although the ACA defined how participating Medicare ACOs would be paid in the program, the legislation did not offer Medicare beneficiaries an incentive to stay within the ACO network. In fact, beneficiaries are not provided advance notice of their participation in an ACO.
"By creating a formal and mutually acknowledged relationship between ACOs and beneficiaries, health care provider organizations that make the investments needed to coordinate care, manage chronic diseases, and manage population health would be more likely to succeed," Ginsburg posits.
ACOs do have some tools to encourage patients to stay within their provider network, including no-cost screenings and marketing, McWilliams notes. While proposals are circulating that would encourage patients to seek care within a single ACO, the objection "is likely to be a moving target, which is why we were interested in" exploring the issue, he says (Crane, Medscape Medical News, 4/22; Evans, Modern Healthcare, 4/21 [subscription required]; Millman, Washington Post, 4/21).