Value-Based Care News

Balancing Specialty and Primary Care Lowers Costs for ACOs

Annual spending per beneficiary was between $752 and $1,129 lower for ACOs delivering 40 to 45% of office visits through specialists, a study shows.

Primary care and accountable care organizations (ACOs)

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By Jacqueline LaPointe

- Accountable care organizations (ACOs) that provided between 40 and 45 percent of office visits through specialists had significantly lower costs compared to ACOs with the lowest and highest specialty care proportions, according to a recent University of Massachusetts Amherst study.

Published in JAMA Open Network, the study of 620 ACOs in the Medicare Shared Savings Program from April 2012 to September 2017 found that ACOs with a balance of specialty and primary care had $1,129 lower annual spending per beneficiary versus ACOs with a specialist visit proportion of less the 35 percent, and $752 lower annual spending per beneficiary compared to ACOs with a specialist visit proportion of 60 percent of more.

“This study provides an empirical backing to the idea that a balance between primary care providers and specialists in the delivery of care for ACO patients, especially high-risk patients with chronic conditions, appears to provide optimal cost savings, or lower expenditures, for these organizations,” lead author Vishal Shetty, MS, a University of Massachusetts Amherst PhD student in the School of Public Health and Health Sciences, stated in a press release.

“We speculated that would be the case, but I don't think we anticipated $1,000 lower spending per patient in the more balanced ACOs,” he said.

Created by the Affordable Care Act, ACOs are an alternative payment and care delivery system that aim to reduce Medicare spending while improving care quality through care coordination. Since their inception, the organizations have relied on primary care providers to accomplish the model’s goals while reducing expensive inpatient care.

“The central message has been that the providers within the ACO need to focus on delivering care through primary care providers,” explained Shetty.

But the study from Shetty and three assistant professors – David Chin, Laura Balzer, and Kimberley Geissler – revealed that specialists also play a key role in reducing costs for ACOs. Not only do ACOs with a balance of specialty and primary care office visits report significantly lower costs, but specialty visits helped to prevent expensive, adverse events, such as an emergency department (ED) visit.

The study found that as the proportion of specialty visits increased in an ACO, the number of ED visits, hospital discharges, and skilled nursing facility discharges fell.

The finding that greater spending per beneficiary among ACOs with the lowest specialist encounter proportion indicated that patients attributed to these organizations receive outpatient care – largely delivered by a primary care provider – associated with higher ED, hospital, and SNF encounter rates, the study stated.

“We speculated that patients seen only or primarily by primary care providers may receive suboptimal care, especially if they are chronic-care, high-risk patients,” Shetty said.

Balancing specialty and primary care visits will become increasingly important as the number of individuals suffering from chronic conditions increases.

Six in ten adults in the US currently have at least one chronic condition, such as cancer, heart disease, or diabetes, the CDC reports. And that number is likely to increase as the aging population significantly increases and becomes more susceptible to chronic conditions that worsen with age, such as hypertension and heart disease.

Primary care providers are good gatekeepers to the healthcare system for individuals with chronic conditions, but specialty care is critical to successfully managing disease progression and symptoms and reducing the number of expensive adverse events as the study found.

However, researchers suggested that ACOs do not currently have the right incentives to bring in specialists.

“There aren’t strong incentives as it stands now for specialists to join ACOs,” Shetty said. “Fee-for-service reimbursement is still a higher incentive.”

ACOs should consider increasing accountability for specialists, researchers advised. ACO leaders and policymakers should consider mandatory specialist representation in ACO governance. Beneficiary attribution by specialist could also incent specialists to participate in the value-based reimbursement model.