Accountable Care Organizations (ACO’s) Contributing to Clinician Consolidations into Large Practices

According to a study in Health Affairs, researchers examined changes in physician practice sizes associated with accountable care organizations (ACO) market penetration three years after the launch of the Medicare Shared Savings Program, which began in 2012 and is one of the country’s largest ACO programs. In counties with more ACOs, they found more large practices and fewer small practices.

Findings

For the study, researchers from the University of Pennsylvania Perelman School of Medicine in Philadelphia and Johns Hopkins University in Baltimore examined how physician practice size changed in counties when ACO presence increased at the county level.

As reported in Fierce Healthcare, the researchers also found evidence suggesting that ACO-driven physician consolidation is accelerating. “These patterns suggest that the consolidation concerns initially raised regarding ACOs were warranted and that gains from care coordination facilitated by ACOs will have to be balanced against higher prices and possibly lower-quality care that could result from consolidation,” the study authors said.

The study looked at whether physician practices consolidated after ACOs entered healthcare markets. Over a five-year period, researchers found a 4.0-percentage-point increase in large practices (defined as those with 50 or more physicians) in counties with the greatest ACO penetration compared to counties with no ACOs.

They also found a 2.7-percentage-point decline in the percentage of small practices (defined as 10 or fewer physicians) from 2010 to 2015. The growth of large practices was concentrated in specialty and hospital-owned practices. ACOs can result in physician practice consolidation as practices merge to improve their ability to coordinate patient care or because hospitals, in response to ACO incentives, acquire multiple physician practices and combine them.