Commercial ACOs more efficient than noncommercial, both struggle with IT

Accountable care organizations (ACOs) that have contracts with commercial payors beat Medicare- and Medicaid-only ACOs on several measures of performance in a study published in the October issue of Health Affairs.

The study, led by David Peiris, PhD, a fellow at Harvard’s T.H. Chan School of Public Health, sought to answer three questions:

1. Do ACOs involved in commercial-payor programs have different structures and outcomes than ACOs involved only in public-payor programs?
2. Are ACOs implementing changes to their provider compensation models and care management processes?
3. Are ACOs adopting features of high reliability organizations to support their sustainability in complex health care environments?

Using responses from 399 ACOs collected by the National Survey of ACOs, the study provided a resounding yes to the first question. The study found commercial ACOs tended to be larger, were more likely to include one or more hospitals and to be jointly led by physicians and hospitals, while 75 percent had Medicare and Medicaid contracts in addition to agreements with commercial insurers.

“The substantially lower benchmark spending and higher efficiency index of commercial ACOs suggests that they are considerably ‘leaner’ organizations when entering Medicare ACO programs compared to noncommercial ACOs, and that they may have already implemented efficiency processes,” Peiris et al. wrote. “This may also explain why the magnitude of savings is generally greater for noncommercial ACOs during their initial Medicare performance years.”

Where contract status didn’t seem to matter was the ability to monitor financial performance at a high level, an area in which both commercial and noncommercial ACOs struggled. Fewer than a third of ACOs reported having that ability, and fewer than half said they were monitoring or reporting at the clinician level.

“The implementation of quality activities still appears to be in an early stage for all ACOs, with only a modest uptake of performance monitoring and quality improvement processes observed,” Peiris and his coauthors wrote. “This suggests that engaging providers in these activities takes time. In addition, it remains unclear what the best ways are to motivate frontline providers to engage in quality improvement activities. It is possible that combining modest financial incentives for performance improvement with quality improvement activities may produce greater change in organizational practices than using either tactic on its own.”

Both commercial and noncommercial ACOs were found to be struggling when it came to IT. A minority of organizations had single electronic health systems (31 percent for commercial ACOs and 15 percent for noncommercial). Also, only 26 percent of responses for commercial and 33 percent for noncommercial reported that more than 75 percent of their primary care physicians met criteria for meaningful use of the systems. This “immature stage of development” for IT may limit reforms to delivery systems, Peiris and his coauthors argued.

The takeaway, according to the study, is many factors influence the sustainability of ACOs and they remain at “a nascent stage.” It calls for the differences between commercial and noncommercial organizations to considered by policymakers who may be tempted to think changes to Medicare and Medicaid are enough to make ACOs successful.