Consolidated Health Networks Lead to Greater Creation of ACOs

Regions of the United States where doctors and hospitals are consolidated into large networks are more likely to have accountable care organizations (ACOs), according to a new RAND Corporation study.

Other factors associated with the formation of ACOs include a greater occurrence of payment risk sharing at hospitals, larger integrated hospital systems and primary care physicians practicing in large groups.

Researchers found wide variation in the geographic distribution of ACOs, with large areas such as the Northwest essentially empty of the organizations, while other regions, including the Northeast and the Midwest, dense with the groups.

A region’s average household income, per capita Medicare spending, enrollment in Medicare Advantage Plans and physician density were not associated with formation of accountable care organizations.

RAND researchers analyzed 148 Medicare ACOs announced in 2012. The groups include 2.3 million patients who account for 7 percent of the Medicare recipients enrolled in fee-for-service (FFS) programs. Researchers also analyzed 77 private-sector entities that resemble ACOs.

These findings may help policymakers craft new policies to accelerate growth of ACOs, researchers say. As a rule, consumers aren’t aware whether their doctors and other health providers belong to an ACO or not, the report states.

ACOs are networks of healthcare providers — doctors, hospitals and other health professions — that receive financial rewards if they can cut costs while maintaining or improving the quality of patient care. The groups do not offer lower premiums to consumers, but hope to attract enrollees by offering better-quality care.

The RAND study, published in the October edition of the journal Health Affairs, is the largest to date to examine the factors associated with the creation of ACOs in the federal Medicare program.

Source: RAND Corporation, October 7, 2013

Guide to Accountable Care Organizations lays the groundwork for an ACO program, delivering a comprehensive set of 2012 ACO benchmarks from 200 companies, a framework for clinical integration, a key ACO prerequisite that puts participating providers on the same performance and payment page, and more.

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