Assessing the Effects of Accountable Care Organizations on Surgical Spending and Quality

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PROJECT SUMMARY Surgical spending accounts for 30% of national health spending and is growing more rapidly than spending in other key healthcare sectors. Many hope that payment reforms included in the Patient Protection and Affordable Care Act will help curtail such spending growth. Chief among these reforms were provisions for establishing accountable care organizations (ACOs). By encouraging deeper health system integration and greater financial stewardship, proponents believe that ACOs will enhance care coordination and reduce the use of unnecessary services, ultimately improving quality and lowering health spending. However, the net effects of ACOs on surgical care remain unclear. On the one hand, ACOs incentives may motivate clinicians to consider cheaper alternatives to surgery in pursuit of lower population expenditures. On the other hand, shared saving agreements could have unintended consequences. For example primary care providers (PCPs) with ACO contracts may place too much emphasis on surgeons' costs, ignoring their quality, when making referral decisions. Moreover, economic pressures may lead surgeons, who rely on ACO PCPs for a steady stream of patients, to withhold costly but valuable care. In addition, important contextual factors may moderate ACO effects. For instance, ACOs frequently do not encompass surgeon practices and ambulatory surgery centers, where a growing share of surgical care is delivered. If these surgical providers are weakly connected to the PCP groups accepting collective accountability, ACOs' influence on them may be attenuated. In this context, we propose a study to better understand the impact that ACOs have on surgical care. Our proposal has the following three Specific Aims. To determine the impact that ACOs have on surgical spending and quality. Using the national Medicare population, we will identify eligible beneficiaries aligned with a Medicare ACO and those that are not. We will then compare surgical and overall expenditures among these beneficiaries before and after ACO formation. For beneficiaries who undergo surgery, we will also assess their perioperative outcomes and total episode payments. Aim 2: To evaluate for clinical heterogeneity in ACO effects on surgical care delivery. We will identify subsets of Medicare beneficiaries from Aim 1 with one of six conditions for which surgery is considered a treatment. We will then evaluate for differences in surgical spending on higher, intermediate, and lower value surgical procedures among these beneficiaries before and after ACO formation. Aim 3: To assess how heterogeneity in policy implementation affects surgical care delivery. Using linked data from the National Survey of Accountable Care Organizations and network analytical tools, we will assess how financial risk and organizational structure (including surgeon participation) moderate ACO effectiveness. Findings from our study will be directly relevant to the Agency for Healthcare Research & Quality's Research Priority Area #3, as they will inform decision makers at the Centers for Medicare & Medicaid Services about the effects of new reimbursement mechanisms on health spending.