← Back to Insights
May 18, 2020
A Fortunate ACO Coincidence
David Burda
Economics Innovation Outcomes

A Fortunate ACO Coincidence

As a skeptical journalist and amateur psychologist, I don’t believe much in coincidences. Things happen for a reason.

Two new and separate studies of accountable care organizations illustrate the point. But, as you read this, remember, correlation is not causation.   

The first study, by researchers from the University of Pennsylvania and Johns Hopkins University, ran in JAMA Network Open on May 8. You can download the study here.  

The second study, by researchers from Leavitt Partners, Dartmouth College, Duke University and the University of Utah, ran in the American Journal of Managed Care on May 14. You can download their study here

In the first study, the researchers wanted to know if medical practices dropped the most vulnerable and potentially sickest and costliest patients from their patient panels after the practices joined a Medicare ACO. The researchers thought the answer would be yes, as those patients would make it less likely that the doctors would hit their ACO cost and quality targets. Less vulnerable and potentially healthier and less costly patients would make it easier to meet those targets and make more money.

Well, the researchers were wrong. After the doctors joined an ACO, they treated essentially the same percentage of patients who were black, who were dually enrolled in Medicare and Medicaid, who were poor and who were unemployed. The study period was 2010 through 2016.

“We found that, overall, physician groups did not engage in cream-skimming by changing the share of socially vulnerable patients in their panels after joining an ACO,” the researchers said.

In the second study, the researchers wanted to know who’s leading ACOs across the country and how that leadership (read ownership) has changed over time. Tapping into Leavitt Partners’ exhaustive ACO data base, the researchers found that physicians increasingly are taking over ACOs as owners.

In 2010, hospitals/health systems and physician groups co-owned 63 percent of the ACOs in existence at that time. Physician groups owned 22 percent of ACOs just by themselves. And hospitals/health systems owned 16 percent of ACOs just by themselves. (I’m rounding percentages here.)

Fast forward to 2018, and the ACO ownership landscape changed dramatically. Physician groups owned 45 percent of ACOs just by themselves. Hospital/health systems and physician practices co-owned 30 percent of ACOs. And hospitals/health systems owned 25 percent of ACOs just by themselves.

In-other-words, the share of all ACOs own and operated just by physicians more than doubled over the eight-year study period.

“Physician groups are becoming the dominant type of new entrant into the ACO space and have been the most successful in achieving savings to date,” the researchers said.

So what’s the connection between the findings of the two studies?

I think the connection is the doctor-patient relationship or, at the very least, the obligation most doctors feel toward treating anyone who’s sick regardless of their social determinants of health. I think it makes them less likely to screen out patients from their ACOs or other value-based delivery models because of patients’ risk profiles. Maybe physicians just aren’t sophisticated enough to do that yet with AI-powered technologies?

Conversely, I can see hospitals or health systems doing that. Most have always tried tilting their payer mix away from the poor, the uninsured and the self-pay. It’s why they open and rebuild new facilities in higher-income neighborhoods. It’s why they merge with and acquire others with better payer mixes. They’re a business, and they go where the money is.

Medical practices are a business, too. But maybe there’s just enough of a soul there not exclude the most vulnerable patients from the latest value-based care models. Maybe.

Definitely not causation. Probably not correlation. But it’s definitely not a coincidence.

Thanks for reading.

Stay home. Stay safe. Stay alive.     

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

Recent Posts

Podcast: How Healthcare Revolutionaries Think With Melina Davis
Podcast: Melina Davis on Doctors Opening Up About Burnout One of the big problems in healthcare is physician… Read More
By June 20, 2024
Prior Authorization Is a Big Waste of Time 
Prior authorization (PA) has been and continues to be a huge thorn in the side of healthcare providers… Read More
By June 19, 2024
Podcast Playlist: GLP-1 Drugs
Credit where it’s due: 4sight Health’s Julie Murchinson predicted the popularity of GLP-1 drugs long before the mainstream… Read More
By June 18, 2024