Costs of accountable care organization participation for primary care providers: early stage results

BACKGROUND: Little is known about the impact of joining an Accountable Care Organization (ACO) on primary care provider organization’s costs. The purpose of this study was to determine whether joining an ACO is associated with an increase in a Rural Health Clinic’s (RHC’s) cost per visit. METHODS: The analyses focused on cost per visit in 2012 and 2013 for RHCs that joined an ACO in 2012 and cost per visit in 2013 for RHCs that joined an ACO in 2013. The RHCs were located in nine states. Data were obtained from Medicare Cost Reports. The analysis was conducted taking a treatment effects approach where the treatment is joining an ACO. Propensity-score matching was employed to provide multiple single and pooled estimates of the average treatment effect on the treated. RESULTS: Four-hundred thirty four to 544 RHCs (depending on the type of analysis and the variables used) were used in the several analyses. Seven of the RHCs joined an ACO in 2012 and 14 joined an ACO in 2013. The mean cost per visit for RHCs that did not join an ACO rose 4.40 % from 2011 to 2012 whereas the mean cost per visit for RHCs that joined an ACO rose by triple: 13.5 %. All of the pooled estimates of the average treatment effect on the treated from the propensity-score matching showed that joining an ACO was associated with higher mean cost per visit. The range of the estimated mean cost per visit differences was $17.19 (p value = 0.00) to $25.19 (p value = 0.00). CONCLUSIONS: This study is one of the first to describe the cost of ACO participation from the perspective of primary care provider organizations. It appears that for at least one type of primary care provider - the RHC - there are substantial costs associated with ACO participation during the first two years.