How Many Patients Are in ACOs?

How many patients enrolled, lives covered?

Since June 2012 the number of accountable care organizations has grown from 221 to 626, as of May 2014. Such rapid growth cannot be ignored and by no means has been. Interested parties from all areas of the healthcare industry have closely watched the rise of the accountable care movement as healthcare providers begin to bear risk for a defined population. Because ACOs are a new phenomenon and their impact is anything but certain, it is difficult to know what impact they are having or will have on the healthcare industry. Another complicating factor is that the term ACO is used to describe a wide range of organizations, from a single small physician group to coalition of disparate providers. (More detail on different types of ACOs can be found here.) With such different organizations represented in the census of ACOs, it is difficult to gauge the significance of an increase from 221 to 626 ACOs. A more useful approach would be to look at the number of patients impacted by ACOs rather than the number of ACOs themselves. This, however, is not as simple as it may sound, as there are different methodologies for counting ACOs — each with their own pros and cons.

Enrolled patients or covered lives
One approach is to look at the number of people for which the ACO is bearing risk as part of an accountable care contract. The ACO will almost always have patients for which it is not at risk and receives traditional fee-for-service payment but the enrolled patients or covered lives are those for which the ACO has a clear financial incentive to improve outcomes. This group could represent a large majority or a tiny fraction of the total patients, and the ACO's commitment to improving outcomes will often depend on how large that proportion is. In many cases, an ACO will only offer certain services such as an assigned care coordinator or a disease management program to patients for which it is financially responsible. For this reason, I believe that this is the most useful measure for measuring the impact of ACOs.

The drawback of this approach is that it can often be difficult to find this information. Government payers often disclose enrollment data, but many commercial payers are reluctant to share these details, either for legal or competitive reasons. Using publicly available information and statistical techniques to create estimates where no information is available, our team has estimated that there are approximately 20.5 million patients enrolled in some type of ACO. This includes the 5.3 million patients enrolled in the Medicare Shared Savings Program and Pioneer program. The remaining 14 million lives are divided between commercial contracts and Medicaid ACO programs.

Patients served by ACOs
Another way to measure the number of people impacted by ACOs is to count the number of patients that are served by providers participating in an ACO. Just because a provider is part of an ACO, though, does not mean that all patients they see are part of that ACO — some ACO providers will have fewer than 5 percent of their total patient panel included in their ACO. Though the provider is not actually at risk for the majority of their patients, there is the possibility that all patients will benefit from the organization's participation in accountable care. For example, the Bellin-Thedacare ACO found that its new care processes resulted in a decreased readmission rate for all of its patients — not just the ones for which it bears risk. An advantage of simply estimating total patients is that the number can be calculated using available databases of patient population sizes and a list of providers in ACOs, regardless of the type of contract between the payer and provider. Using this method, researchers at Oliver Wyman calculated that ACOs serve between 46 and 52 million patients.

A drawback of this method is that the extent of spillover depends on whether the ACO implements changes broadly or in a targeted manner. Through our interviews with ACOs we have found that it is more common for ACOs to take a targeted approach, focusing on patients that have specific conditions and are part of risk-bearing contracts. While some changes will inevitably be employed across the entire organization, more resource-heavy interventions, such as care coordination, are usually reserved for the patients where the provider bears some financial risk.  

Access to an ACO
A third approach is to look at the number of people living in an area where an ACO is in operation. This approach was also used by Oliver Wyman researchers who found that over two-thirds of Americans have access to an ACO. This measure is useful because it reflects the geographic prevalence of ACOs — most people have one nearby. It also hints at the potential growth of ACOs. If an ACO is successful at delivering higher-value care, it could attract more patients from within a service area.

The limitation of this figure is that people living near an ACO will not be impacted unless the ACO bears risk for their outcomes, or at the very least has some interaction with them. Based on our research of hospital service areas and ACO clinic locations, over 85 percent of the U.S. population has "access" to an ACO, though living within a service area of an ACO-affiliated hospital is much different than actually receiving care.

The differing numbers resulting from these methods could cause confusion, which is why it is important to understand what each method represents and the advantages and limitations of each. As the accountable care movement progresses, careful monitoring of patients enrolled in ACOs, served by ACOs and near ACOs will give insight into how this movement is shaping the healthcare industry.  

Paul Gardner is a senior analyst at Leavitt Partners. As an analyst, Mr. Gardner informs client decision-making by providing unparalleled insight into how payment models and care integration trends are impacting the health care landscape. Specifically he focuses on gathering information about the accountable care movement and organizing and mobilizing that information. Prior to joining Leavitt Partners, Mr. Gardner worked as an analyst for the Huntsman Cancer Hospital in Salt Lake City, Utah. Mr. Gardner has earned both a master’s of healthcare administration and a master’s of business administration from the University of Utah.

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