February 25, 2013

A tale of two ACOs: New study compares models

New ways of delivering primary care—like the medical home—can improve care and potentially save money downstream by lowering hospital admissions. But our nation’s largely fee-for-service health care system tends to be so fragmented that such savings cannot be shared. Also, outside of integrated health systems, financial incentives often favor giving people more tests and treatments at each step along their medical journeys, rather than rewarding providers for keeping patients healthy.

That’s why, when Congress passed the Affordable Care Act in 2010, it called for the establishment of accountable care organizations (ACOs). This is a new payment and delivery model designed to change these “perverse” incentives. The goal is to encourage groups of providers—physicians, hospitals, home-health agencies, and so on—to form coalitions. Each coalition would serve a defined community of patients across the continuum of care, taking responsibility for their overall health costs and care quality.

But how should such coalitions be built? Group Health Research Institute hopes to help discover this in a new study underway with partners from Scott & White Healthcare—an integrated health care system in Central Texas and one of GHRI’s partners in the HMO Research Network. 

The study, sponsored by a three-year grant from The Commonwealth Fund, will compare the two organizations’ efforts to work with traditional fee-for-service practices in their communities.

“This study gives us an opportunity to compare models in organizations and environments that are responding very differently to new policies and market conditions,” explains Robert J. Reid, MD, PhD, Group Health associate medical director for research translation and the study’s principal investigator. 

At first glance, Group Health and Scott & White appear similar. Historically, both had operated as closed, capitated systems—paid mostly per patient for providing care using their own clinicians and facilities. And both are now experimenting by combining their capitated systems with traditional fee-for-service practices.

But the two systems differ in how they approach developing ACOs.  For example, Group Health has mainly formed new relationships with traditional fee-for-service primary care organizations in specific geographical areas, such as The Everett Clinic. For this study, researchers will examine Group Health’s affiliation with Columbia Medical Associates, a 50-provider group serving 75,000 patients in Spokane. Formed in 2011, this ACO also includes Providence Health & Services, which operates Sacred Heart Medical Center and Children’s Hospital in Spokane. This lets Group Health and its partners align payment incentives and create clinical pathways across the continuum of primary, specialty, and hospital care.

In contrast, Scott & White has approached its ACO development by expanding geographically and adding outpatient clinics in the areas served by its quickly expanding hospital base.

The policy environments in Washington state and Texas also differ. “Washington will operate a health-insurance exchange and experience Medicaid expansion within a very coordinated, managed care-based market,” explains GHRI Senior Investigator Paul Fishman, PhD, one of the study’s co-investigators. “Texas has very little managed care and will have no exchanges or Medicaid expansion.”

The study will compare the impact of such differences on the ACOs’ quality and cost of care and the experiences of their providers and patients. Study results may help the researchers’ respective health plans and other organizations to navigate health care’s changing landscape. 

“As the nation experiments with many versions of accountable care, we believe that the lessons learned from these case studies will have national applicability to health care reform and implementation,” says GHRI Assistant Investigator Robert Penfold, PhD, another co-investigator on the study.

The research team also includes Research Associate Clarissa Hsu, PhD, Biostatistician Eric Johnson, MS, Research Associate DeAnn Cromp, MPH, Project Manager Gabrielle Gundersen, and Programming Manager Tyler Ross, MA, at GHRI; and Laura Copeland, PhD, and John Zeber, PhD, from Scott & White’s Center for Applied Health Research.


by Joan DeClaire