The regions of the U.S. that have doctors and hospitals consolidated into large networks are more likely to have accountable care organizations - medical practice structures that seek to improve medical care and reduce costs - according to a new RAND Corporation paper written to bolster support for the federal Affordable Care Act.
Consolidation and accelerating growth of large accountable care organizations are a key cost control strategy for Obamacare.
Accountable care organizations are networks of health care providers - doctors, hospitals, insurance companies - that receive financial rewards if they can cut costs while maintaining or improving the quality of patient care. Because they don't offer lower costs, they hope to attract enrollees by offering better-quality care. That's the "Cadillac" health care that government employees and unions have. The Affordable Care Act would like to add more of those, believing that better care will save money in the long term.
The authors analyzed 148 Medicare accountable care organizations announced in 2012. The groups include 2.3 million patients who account for 7 percent of the Medicare recipients enrolled in fee-for-service programs. Researchers also analyzed 77 private-sector entities that resemble accountable care organizations. Researchers found wide variation in the geographic distribution of accountable care organizations, with large areas such as the Northwest essentially empty of the organizations. Meanwhile other regions, including the Northeast and the Midwest, are dense with the groups.
Factors associated with formation of accountable care organizations include a greater occurrence of payment risk sharing at hospitals, larger integrated hospital systems and primary care physicians practicing in large 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.
Citation: David I. Auerbach, Hangsheng Liu, Peter S. Hussey, Christopher Lau and Ateev Mehrotra, 'Accountable Care Organization Formation Is Associated With Integrated Systems But Not High Medical Spending', Health Affairs October 2013 vol. 32 no. 10 1781-1788 doi: 10.1377/hlthaff.2013.0372