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Five-year Impact of a Commercial Accountable Care Organization on Health Care Spending, Utilization, and Quality of Care

Zhang, Hui PhD; Cowling, David W. PhD; Graham, Joanne M. PhD; Taylor, Erik BA

doi: 10.1097/MLR.0000000000001179
Original Article

Background: Accountable Care Organizations (ACOs) have proliferated after the passage of the Affordable Care Act in 2010. Few longitudinal ACO studies with continuous enrollees exist and most are short term.

Objective: The objective of this study was to evaluate the long-term impact of a commercial ACO on health care spending, utilization, and quality outcomes among continuously enrolled members.

Research Design: Retrospective cohort study design and propensity-weighted difference-in-differences approach were applied to examine performance changes in 2 ACO cohorts relative to 1 non-ACO cohort during the commercial ACO implementation in 2010–2014.

Subjects: A total of 40,483 continuously enrolled members of a commercial health maintenance organization from 2008 to 2014.

Measures: Cost, use, and quality metrics for various type of services in outpatient and inpatient settings.

Results: The ACO cohorts had (1) increased inpatient and outpatient total spending in the first 2 years of ACO operation, but insignificant differential changes for the latter 3 years; (2) decreased outpatient spending in the latter 2 years through reduced primary care visits and lowered spending on specialists, testing, and imaging; (3) no differential changes in inpatient hospital spending, utilization, and quality measures for most of the 5 years; (4) favorable results for several quality measures in preventive and diabetes care domains in at least one of the 5 years.

Conclusions: The commercial ACO improved outpatient process quality measures modestly and slowed outpatient spending growth by the fourth year of operation, but had a negligible impact on inpatient hospital cost, use, and quality measures.

Health Policy Research Division, California Public Employees’ Retirement System (CalPERS), Sacramento, CA

Presented at the Academy Health Annual Research Meetings in Boston, MA, June 27, 2016 and New Orleans, LA, June 26, 2017.

The authors declare no conflict of interest.

Reprints: Hui Zhang, PhD, Health Policy Research Division, California Public Employees’ Retirement System (CalPERS), 400 Q Street, LPN Suite 5100, Sacramento, CA 95811. E-mail:

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