Accountable Care Organizations: Early Results and Future Challenges

Broader Challenges

While clinical integration is a central tenet of ACOs, consolidation between providers is simultaneously a chief concern for policymakers. Consolidation generally reduces competition and drives up prices, which is at odds with the goals of cost containment [47,48].Across the nation, physicians are consolidating with hospitals and health systems at an increasing rate, with recent surveys reporting that the proportion of independent physicians has steadily declined to below 50% [49–52].Increasing the number of covered lives is a dominant growth strategy under risk contracts, and more covered lives also increases an ACO’s bargaining power during acquisitions of specialist practices, whose referrals are better protected by inclusion in the provider network. As this trend continues, its effect on commercial prices will likely be scrutinized [53,54].

The ACO paradigm may also have significant effects on the physician labor market. Over the past 4 decades, the rate of physician specialization has grown dramatically [55].Fee-for-service incentives were aligned with specialization, but a rapid transition to alternative payment systems may disrupt the more gradually evolving physician labor market. Most medical school graduates today choose to specialize, as do most graduates of general medicine training programs [56,57],yet it is unclear to what degree the demand for specialists will continue to grow in the accountable care era. Specialty services tend to be of higher cost than generalist services. In some situations, high-cost services are more likely to be of lower value [58–60].Yet having specialists allows an organization to integrate services across the continuum of care, for which they are now financially responsible. As a new generation of specialists prepares to enter practice, whether the health care system will be able to support them and fulfill their expectations about their practice environment may be in question.

Looking into the Future

The landscape of payment and organization in health care will likely continue to migrate towards the ACO concept [61,62]. As the federal government, states, and individual payers move in similar directions, physicians and hospitals will face increasing pressures to change and adapt to new incentives surrounding cost and quality. Whether ACOs succeed in slowing spending while improving quality may have important ramifications for future stages of health care reform. For example, the growing debate in Washington, DC, over the future of Medicare financing may be informed, in part, by whether ACOs succeed within the traditional Medicare program. Market-based reforms, such as converting Medicare into a premium support program whereby private insurers compete to insure Medicare beneficiaries for a pre-defined contribution from the federal government, have been gaining momentum in recent years. Although not without concerns, such proposals would expect to gain consideration if the ACO model does not succeed.

Perhaps the most meaningful contribution of the ACO model is that it gives providers a reason to change the culture of medicine. It asks providers across specialties to work together and coordinate care in a way that was not rewarded under fee-for-service. It asks organizations to stitch the separate pieces of the patient’s care trajectory together through teamwork. In the long run, this may be the most intangible but substantive legacy that the ACO model provides. Under a single, collective contract at the organizational level, providers are quite literally in it together. If providers can break down silos, improve care coordination, and manage population health with a collective vision towards keeping patients healthy, the ACO paradigm would be able to claim a profound achievement. Such changes, however, will take time and they are not guaranteed.

Corresponding author: Zirui Song, MD, PhD, Department of Medicine, Massachusetts General Hospital, 55 Fruit St., Boston, MA 02114, zirui_song@post.harvard.edu.

Funding/support: Supported by a grant from the National Institute on Aging F30 AG039175.

Financial disclosures: None.