Benchmarking Implications: Analysis of Medicare Accountable Care Organizations Spending Level and Quality of Care

Early evidence has shown that Accountable Care Organizations (ACOs) have achieved some success in improving the quality of care and reducing Medicare costs. However, it has been argued that the ACO rewarding model may disproportionately affect relatively low-spending (LS; considered as efficient) organizations that have fewer options to cut unnecessary services compared with high-spending (HS; inefficient) organizations. We conducted a cross-sectional retrospective study to compare ACO financial and quality of care performance between HS-ACO and LS-ACO. After adjusting for ACO organizational factors and beneficiary characteristics, we found that HS-ACOs generated greater savings per beneficiary than LS-ACOs ($501 vs. -$108, p < .001); however, HS-ACOs had a lower quality of care performance (48.79 vs. 53.29, p = .002). Specifically, LS-ACOs had better quality performance than HS-ACOs in patient experience/satisfaction (p = .02), preventive care services (p = .004), and hospitalization management (p = .001), whereas HS-ACOs better performed in routine checkup/follow-up (p < .001) and risk population management (p = .048). Our findings indicated that Medicare ACO rewarding model seems to be advantageous for HS-ACOs regardless of the overall quality of care performance.