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Internal and External Factors Conducive to Hospital Participation in CMS Accountable Care Organizations (ACO)

Askar S. Chukmaitov, M.D., Ph.D. David W. Harless, Ph.D. Gloria J. Bazzoli, Ph.D. Yangyang Deng, M.S. Virginia Commonwealth University (VCU) Agency For Healthcare Research and Quality, Grant #R01 HS023332

To identify internal and external factors conducive to hospital participation in the Centers for Medicare and Medicaid Services’ (CMS) Medicare Shared Savings Program (MSSP) and Pioneer Accountable Care Organizations (ACOs) Internal: hospital structures and processes-of-care External: environment and market characteristics

Objectives

• ACOs may seek hospital and health system participation as they

can provide:  Organizational and legal framework for comprehensive care delivery  Effective care coordination and transitions of patients across the care continuum  A broad array of health services addressing needs of Medicare beneficiaries

• Participating ACO hospitals may provide resources and invest

in:  Health Information Technology  Performance measurement, data sharing, and reporting systems for managing population health

Rationale for Study

Conceptual Framework

Favorable Structures:

• More centralized health systems
• Experience managing risk-based contracts
• Tight physician-hospital linkages
• More advanced HIT
• Focus on preventative services
• High structural quality score
• Links with providers on care continuum

MSSP: One-sided, Shared Savings Pioneer ACO: Two-sided, Shared Savings/Losses Processes of care:

• Evidence-based care processes in place

Environmental Munificence:

• Availability of primary care physicians
• Specialists
• Additional Resources
• Geographic location: rural vs. urban

 Data:  Participating ACO hospitals were identified through CMS

announcements and lists, case-by-case evaluation, and reaching out to ACO coordinators

 32 Pioneer ACO (2012) and 355 MSSP ACO (2012,

2013)

 Secondary data - AHA, CMS demonstration pilots,

HIMSS, CMS Hospital Compare, and AHRF

 Sampling:  All nonfederal, short-term, general medical-surgical

hospitals with complete data from 50 states for 2011, i.e. prior to ACO formation:

 105 (out of 158) hospitals in Pioneer ACOs  340 (out of 521) hospitals in MSSP  3,296 non-participating hospitals (2012)

Methods (1)

 Analytic Approach:  The multinomial probit for models with three outcomes:  Not participating in an ACO (referent)  Participating in MSSP ACO  Participating in Pioneer ACO  Analyzed whether favorable structures, processes-of-care,

• r environmental munificence were more important for

hospital participation in CMS ACOs

 Compared composite measures of more favorable vs. less

favorable internal and external characteristics for hospitals in MSSP, Pioneer ACOs, and non-participating hospitals

 Supplemental analysis for hospital ACO participation,

excluding 28 hospitals in Pioneer and 8 hospitals in MSSP ACOs that ceased participation in 2014.

Methods (2)

Methods: Key Measures (1)

Favorable Structures Hospital’s health system affiliation (1) Centralized Health Systems (CHS); (2) Moderately Centralized Health Systems (MCHS); (3) Decentralized Health Systems (DHS); (4) Freestanding Hospital (referent) PGP transition or HCBDP demonstration (1) Yes; (2) No (referent) for participation in CMS pilots for establishing ACO-like risk-based payments and care management programs Number of Physicians in Tight POA Physicians in tightly integrated POAs – Management Service Organization (MSO), Integrated Salary, Equity, and Foundation measured in hundreds Count of More Advanced HIT (1) Nursing documentation and (2) Electronic medication administration. Count of Preventative Services (1) Breast cancer screening; (2) Community outreach; (3) Crisis prevention; (4) Community health education; (5) Screenings; (6) Immunizations; (7) Indigent care; (8) Patient education center; (9) Patient representatives; (10) Social work; (11) Transportation to services Structural Quality Score (1) Highest quartile for inpatient admissions; (2) Joint Commission’s accreditation; (3) Commission of Cancer’s accreditation; (4) transplant services; (5) level I trauma center; (6) highest quartile for nurse-to-bed ratio; (7) teaching status

Methods: Key Measures (2)

Favorable Structures (cont.) Linkages with Ambulatory Facilities (Count of five linkages) (1) Freestanding outpatient center, (2) Hospital-based

• utpatient care center, (3) Primary care department, (4) Home

care, and (5) Urgent care. Processes of Care Total Joint Commission (TJC) Composite Score Hospital’s performance on 22 accountability measures for evidence-based processes-of-care for heart attack, pneumonia, surgical care were developed. If a hospital’s scored high on care for all four conditions, then it was rank in (1) Low composite score tier; if scored high on three conditions, then (2) Medium tier; if scored high on two condition, then (3) High tier Environmental Munificence Primary Care Physicians Supply Sum of physicians in internal medicine, family practice, and pediatrics per 1,000 residents in a county Specialists Supply (Total number of physicians - physicians in internal medicine, family practice, and pediatrics) per 1,000 population in a county Median Income Median household income in a county (in thousands of dollars) Hospital location (1) Rural; (2) Urban (referent)

Table1: Variable Means (Standard Deviations) in 2011, by 2012-2013 CMS Accountable Care Organization Participation. Variable Nonparticipant MSSP Pioneer p-value Centralized Health System 0.096 (0.295) 0.259 (0.439) 0.229 (0.422) p<0.001 Moderately Centralized Health System 0.146 (0.353) 0.282 (0.451) 0.352 (0.480) p<0.001 Decentralized Health System 0.242 (0.428) 0.238 (0.427) 0.190 (0.395) 0.48 PGP Transition or HCBDP Demonstration 0.005 (0.070) 0.056 (0.230) 0.086 (0.281) p<0.001 Preventative Services Scope and Mix 6.37 (2.47) 7.39 (2.16) 7.35 (2.21) p<0.001 Number Physicians in Tight POAs (in hundreds) 0.30 (1.23) 0.66 (1.84) 1.13 (4.00) p<0.001 Count among More Advanced HIT Applications 1.33 (0.85) 1.58 (0.75) 1.61 (0.70) p<0.001 Count of Linkages with Ambulatory Facilities 2.12 (1.33) 2.43 (1.30) 2.21 (1.23) p<0.001 Structural Quality Score 1.73 (1.60) 2.51 (1.63) 2.54 (1.64) p<0.001 TJC Composite First Tier 0.128 (0.335) 0.132 (0.339) 0.190 (0.395) 0.18 TJC Composite Second Tier 0.111 (0.314) 0.171 (0.377) 0.143 (0.352) 0.003 TJC Composite Third Tier 0.096 (0.295) 0.115 (0.319) 0.190 (0.395) 0.004 PCPs per 1,000 Population 0.68 (0.39) 0.88 (0.56) 0.93 (0.48) p<0.001 Specialists per 1,000 Population 1.04 (1.19) 1.62 (1.69) 1.67 (1.55) p<0.001 Median Income (in thousands of dollars) 46.7 (12.0) 51.3 (12.1) 55.2 (12.9) p<0.001 Rural 0.266 (0.442) 0.121 (0.326) 0.095 (0.295) p<0.001

Table 2: Estimates of Marginal Effects from Multinomial Probit Model of CMS ACO

• Participation. a

Full Estimation Sample Excluding Hospitals Ceasing Participation by the End of 2014 Variable MSSP Pioneer MSSP Pioneer Centralized Health System 0.1273*** 0.0216* 0.1303*** 0.0059 (0.0184) (0.0093) (0.0186) (0.0076) Moderately Centralized Health System 0.1002*** 0.0276** 0.0952*** 0.0186* (0.0151) (0.0088) (0.0149) (0.0080) Decentralized Health System 0.0540*** 0.0024 0.0533***

• 0.0059

(0.0114) (0.0062) (0.0114) (0.0054) PGP Transition or HCBDP Demonstration 0.2686*** 0.0969* 0.2813*** 0.0873* (0.0649) (0.0444) (0.0656) (0.0401) Number Physicians Tight POAs (in hundreds)

• 0.0000

0.0028* 0.0004 0.0025* (0.0028) (0.0013) (0.0028) (0.0011) Count of Advanced HIT Applications 0.0363*** 0.0042 0.0349*** 0.0092* (0.0077) (0.0045) (0.0078) (0.0044) PCPs per 1,000 Population 0.0376 0.0320* 0.0193 0.0414*** (0.0229) (0.0145) (0.0239) (0.0122) ln(Median Income) 0.0576* 0.0300* 0.0597** 0.0383** (0.0230) (0.0136) (0.0227) (0.0120) Not-for-profit Ownership 0.0793*** 0.0259*** 0.0770*** 0.0144* (0.0106) (0.0065) (0.0108) (0.0063) Herfindahl-Hirschman Index

• 0.0383*
• 0.0347**
• 0.0445*
• 0.0295**

(0.0192) (0.0120) (0.0192) (0.0105)

a Standard errors of marginal effects in parentheses, * p < 0.05, ** p < 0.01, *** p < 0.001

Results – Main Effects (1)

 Hospital favorable structures were much more important

then environmental factors for hospital participation in both MSSP and Pioneer ACOs

 Several factors were important for hospital participation that

were estimated in both MSSP and Pioneer ACO models:

 System affiliation  Prior experience with risk-based payments  More advance HIT  Non-profit ownership  Location in counties with higher median income and

hospital competition

Results – Main Effects (2)

 Hospitals in decentralized health systems were likely

participants in MSSP ACO

 Hospital participating in Pioneer ACO were more likely to

be in:

 Centralized and moderately centralized health systems  Tightly integrated hospital – physician arrangements  Located in areas with sufficient supply of primary care

physicians

• Administrative data had no direct measures of ACO-related
• rganizational and processes-of-care transformations (e.g.,

care management)

• More research is needed to evaluate organizational and

processes-of-care redesign using primary data

• We do not have information on private ACOs. Even though

CMS ACOs are now taking a leading role in the ACO development, research on private ACO formation is needed

• More research is needed on hospital participation in CMS

ACO programs and quality and cost outcomes

Limitations and Future Research

 Hospitals with favorable structures may participate in CMS

ACO formation in states where ACOs are still rare

 For example, non-profit hospitals affiliated with health systems that

have advanced HIT, located in counties with more financial resources and competition, may consider participating in MSSP ACOs

 Existing MSSP ACOs that have hospitals with favorable

structures (e.g., more centralized health systems, tight hospital–physician arrangements) may be ready for transitioning into two-sided risk models

 Pioneer ACOs with hospitals with favorable structures may

be ready to take on more risks, e.g., capitation.

Implications for Policy

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