The Patient Protection and Affordable Care Act placed a greater emphasis on models of reimbursing physicians and hospitals that hold them accountable for both quality and cost of care, an approach commonly referred to as value-based purchasing (VBP). The accountable care model is a particular VBP approach that has expanded rapidly. Within a Medicare Shared Savings Program (MSSP) accountable care organization (ACO), physician group practices, hospitals, and health systems can receive payments known as “shared savings” for meeting care quality and spending benchmarks. Study findings have shown that ACOs improve care quality but only modestly reduce annual beneficiary spending. However, evidence suggests that spending reductions are heterogeneous across organizational characteristics of the ACO.Further exploration of ACO features associated with spending reductions may help identify pathways for ACOs to control costs.
One group that has faced challenges in VBP programs is the small physician practice. For small practices, participating in an ACO offers a potential opportunity to gain the benefits of provider networks that can overcome the burdensome requirements for VBP participation. Small practices face obstacles when joining and participating in VBP due to their lack of infrastructure (eg, health information technology), administrative and business expertise, and capital.1Small practices may help ACOs obtain shared savings payments by limiting high-cost inpatient and specialty care and forming strong bonds with patients, thus increasing treatment adherence. Patients in small practices are also less likely to have avoidable hospital stays and readmissions. Further, small practices are nimbler when adjusting care to meet ACO quality and spending benchmarks. Therefore, we hypothesized that there would be greater reductions in spending for patients attributed to small practices in ACOs relative to large practices.