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Analysis

One Key to ACO Spending Reductions? More Specialists.

By Alexandra Wilson Pecci  
   July 11, 2019

ACOs in which 40% to 45% of the patient visits were provided by a specialist had $1,129 lower annual spending per beneficiary than ACOs with a specialist visit proportion of less than 35%.

An ACO's ability to reduce spending requires more than primary care providers' efforts. It also seems to require a specific balance of involvement from medical specialists, finds a new study in JAMA Network Open.

UMass Amherst researchers examined data on 620 ACOs from CMS' Shared Savings Program to investigate the association between office visits to medical specialists and healthcare spending. The data spanned from April 2012 through September 2017.

They found that ACOs in which 40% to 45% of the patient visits were provided by a specialist had $1,129 lower annual spending per beneficiary than ACOs with a specialist visit proportion of less than 35%.

They also found that there was $752 lower annual spending per beneficiary than ACOs with a specialist visit proportion of 60% or more.

"This study provides an empirical backing to the idea that a balance between primary care providers and specialists in the delivery of care for ACO patients, especially high-risk patients with chronic conditions, appears to provide optimal cost savings, or lower expenditures, for these organizations," co-author Vishal Shetty, a University of Massachusetts Amherst Ph.D. student in the School of Public Health and Health Sciences, said in a statement.

"We speculated that would be the case, but I don't think we anticipated $1,000 lower spending per patient in the more balanced ACOs," he said.

The researchers also found that as the proportion of specialist visits increased in an ACO, the number of emergency department visits, hospital discharges, and skilled nursing facility discharges decreased.

The researchers suggest that policymakers consider adding medical specialists to ACO governance and creating better financial incentives for specialists in the ACO model.

"There aren't strong incentives as it stands now for specialists to join ACOs," Shetty said. "Fee-for-service reimbursement is still a higher incentive."

Specialist involvement also played a role in another ACO study from Dartmouth's Geisel School of Medicine, which found that although the number of ACOs had grown fivefold from 2012-2018, the proportion of ACOs taking on downside risk remained relatively stable, increasing from 28% in 2012 to 33% in 2018.

When examining the leadership, services, and size of ACOs, the researchers reported in Health Affairs that those bearing downside risk were less likely to be physician-led or physician-owned; more likely to be part of larger, integrated delivery systems (that included hospitals); had more participating physicians; and were more likely to provide services such as inpatient rehabilitation, routine specialty care, and palliative or hospice care.

Overall, the majority were upside-only risk contracts, which reward cost and quality improvements but do not financially penalize poor performance. There is concern among industry experts that these kinds of contracts might not provide adequate incentives to boost ACO performance, the researchers said.

Alexandra Wilson Pecci is an editor for HealthLeaders.


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