Accountable Care Organizations

Accountable Care Organizations Literature

(335) McClellan M. Accountable Care Organizations and Evidence-Based Payment Reform. JAMA. 2015;313(21):2128-2130. doi:10.1001/jama.2015.5087.

PMID: 25938803


  • Overview of what accountable care organizations (ACOs) are how they work to shift payments away from fee-for-service.
  • ACOs allow clinicians more flexibility as long as costs and quality are maintained at appropriate levels but places ACOs at much increased financial risk if cost and quality are not improved.
  • Study by Nyweide et al in same issue of JAMA includes a comprehensive data set on the effects of Medicare’s Pioneer ACO program, shifting “the effect of ACOs from speculation to reality.”
  • In comparison with other Medicare plans, Pioneer ACOs reduced total Medicare Part A and Part B spending by $427 per beneficiary in the first year and by $134 per beneficiary in the second year.
  • Results did not indicate any adverse consequences on quality
  • Author indicates if ACO reforms reach more clinicians and patients then a more systematic effect could be observed resulting in greater savings.

Significance to Literature:

ACO payment reforms help healthcare organizations reduce cost and improve patient satisfaction without adverse effects on quality. This may be a preferable approach to P4P.


(352) Ryan AM, Shortell SM, Ramsay PP, Casalino LP. Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations. Annals of Family Medicine. 2015;13(4):321-324. doi:10.1370/afm.1805.

PMID: 26195675


  • Comparison of compensation arrangements with primary physicians between practices in Accountable Care Organizations (ACOs) vs non ACOs, as well as between practices that bear financial risk vs no financial risk.
  • ACO participation was associated with higher compensation tied to quality.
  • Financial risk bearing practices was associated with higher compensation tied to salary.

Significance to Literature:

Incentives for ACOs alone (ignoring financial risk bearing) might not be strong enough to promote compensation policies tied to the triple aim.


(364) Gleeson S, Kelleher K, Gardner W. Evaluating a Pay-for-Performance Program for Medicaid Children in an Accountable Care Organization. JAMA Pediatr. 2016 Mar 1;170(3):259-66. doi: 10.1001/jamapediatrics.2015.3809.

PMID: 26810378


  • Retrospective cohort study conducted from January 1, 2010 to December 31, 2013 to determine if P4P improved physician performance within the context of a pediatric accountable care organization (ACO) serving Medicaid children in Ohio
  • Physicians were divided into three groups
  • Community physicians who received P4P incentives
  • Non-incentivized community physicians
  • Non-incentivized hospital physicians
  • Among the 21 quality measures (14 subject to incentives) examined, incentivized community physicians showed greater performance improvement than non-incentivized community physicians in 5 incentivized and 2 non-incentivized measures
  • Hospital non-incentivized physicians had greater performance improvements on 8/14 incentivized measures and 1/7 non-incentivized measures

Significance to Literature:

P4P alone in a pediatric ACO appears to result in modest performance improvement, but “other interventions at the disposal of the ACO may have been more effective.”


(373) Powers BW, Chaguturu SK. ACOs and High-Cost Patients. N Engl J Med. 2016 Jan 21;374(3):203-5. doi: 10.1056/NEJMp1511131

PMID: 26789867


  • High-utilizing patients are a chief concern among accountable care organizations (ACOs)
  • For the costliest 1%, little is known about the characteristic variations for those in Medicare vs Medicaid vs commercial insurance
  • Analysis of 2014 claims for the costliest 1% of patients at Partners HealthCare in Massachusetts
  • Medicare patients in the top 1% of cost had an average of 8.1 chronic conditions and more than half had end-stage sequelae
  • Medicaid high-utilizing  patients had fewer chronic conditions on average (5.1) but an increased burden on mental health conditions
  • Commercial plan high-cost patients had the fewest chronic conditions and were associated with catastrophic injuries, neurologic events, or specialty pharmaceuticals
  • Health systems and physicians each have their own roles and responsibilities in improving the understanding of clinical characteristics and patterns of high-risk subgroups

Significance to Literature:

Optimizing investment in managing the costliest patients should consider the specific needs of the subgroup.


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