In a study that evaluated the differences between accountable care organizations (ACOs) that have a hospital in their provider network and those that do not, researchers found that certain kinds of hospitals were more likely to participate in an ACO, but no significant differences were observed in the ACOs’ ability to manage hospital-related aspects of patient care. 

Although 63 percent of the 269 ACOs evaluated included a participating hospital, the researchers noted that just 20 percent of 5,110 hospitals throughout the country participated in an ACO in 2014, and only 10 percent participated in a Medicare ACO. 

ACO hospitals tended to be in highly populated urban areas rather than rural locations, be teaching hospitals and be nonprofit (versus for-profit or government-owned). They also tended to treat a smaller proportion of Medicare patients and offered a broader range of services as compared with non-ACO hospitals. 

Patients in ACOs who received care at hospitals tended to be sicker and have longer stays, suggesting that these hospitals have more clinically complex patients. Nonetheless, no significant differences were found in the rates of readmission or serious complications between the ACO hospitals and the non-ACO hospitals. 

ACOs with hospitals had twice the number of full-time-equivalent primary care clinicians and more than three times the number of specialty physicians as compared with ACOs that did not have hospitals. ACOs with hospitals also offered a more comprehensive selection of services—for instance, 67 percent of ACOs with hospitals and 10 percent of ACOs without hospitals offered post-acute care. Of note, only approximately 25 percent of ACOs in either group reported having all or nearly all systems in place to ensure smooth transitions from one care setting to another.

The study authors noted several arguments in favor of including hospitals in ACO provider networks. For one, hospitals can provide startup capital and offset an ACO’s downside risk. For another, there is a greater capacity for sharing data between inpatient and outpatient settings (such as discharge summaries). Further, more opportunities are available to engage providers across the continuum of care, which can give ACOs greater control over quality and the total cost of care. 

Conversely, some ACOs said they could better commit to reducing hospital costs, including in-patient and emergency department spending, by not having a hospital in their network. As an example, ACOs without hospitals faced no conflict if better care coordination led to reductions in readmissions and emergency department use—and thus, decreased hospital revenue.

The researchers said they did “not know yet whether the inclusion of a hospital in an ACO is necessary to achieve successful quality or cost-performance. Our qualitative interviews indicate that some ACOS have decided that the costs of hospital inclusion outweigh the benefits.”

The study, conducted by The Commonwealth Fund and published in the March issue of Health Affairs, was based on responses from 269 ACOs to a national survey between October 2012 and March 2014.

Our Take: The gem within their research is for post-acute providers. With only a quarter of ACOs having the expertise or technology to navigate care transitions smoothly, it highlights the need to partner with those who can effectively. ACOs without hospitals, with substantially less ability to provide post-acute services, are in most need of aligning their efforts with a post-acute provider.

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