Do Accountable Care Organizations Differ According to Physician-Hospital Integration?

Physician-hospital integration among accountable care organizations (ACOs) has raised concern over impacts on prices and spending. However, characteristics of ACOs with greater integration between physicians and hospitals are unknown. We examined whether ACOs systematically differ by physician-hospital integration among 16 commercial ACOs operating in Massachusetts. Using claims data linked to information on physician affiliation, we measured hospital integration with primary care physicians for each ACO and categorized them into high-, medium-, and low-integrated ACOs. We conducted cross-sectional descriptive analysis to compare differences in patient population, organizational characteristics, and healthcare spending between the three groups. In addition, using multivariate generalized linear models, we compared ACO spending by integration level, adjusting for organization and patient characteristics. We identified non-elderly adults (aged 18-64) served by 16 Massachusetts ACOs over the period 2009 to 2013. High- and medium-integrated ACOs were more likely to be an integrated delivery system or an organization with a large number of providers. Compared to low-integrated ACOs, higher-integrated ACOs had larger inpatient care capacity, smaller composition of primary care physicians, and were more likely to employ physicians directly or through an affiliated hospital or physician group. A greater proportion of high-/medium-integrated ACO patients lived in affluent neighborhoods or areas with a larger minority population. Healthcare spending per enrollee in high-integrated ACOs was higher, which was mainly driven by a higher spending on outpatient facility services. This study shows that higher-integrated ACOs differ from their counterparts with low integration in many respects including higher healthcare spending, which persisted after adjusting for organizational characteristics and patient mix. Further investigation into the effects of integration on expenditures will inform the ongoing development of ACOs.