Standalone ACOs Saved More Than Hybrid Medical Home Models

Accountable care organizations (ACOs) and patient-centered medical homes (PCMHs) both saved money compared to standard care, but combining the alternative payment and care delivery models did not lead to double the savings, according to a new study from the University of Toledo.

The study recently published in the American Journal of Managed Care found that standalone ACOs and standalone PCMHs were associated with greater reductions in healthcare costs compared to standard care and hybrid models.

A retrospective database analysis using the 2016 Medical Expenditure Panel Survey (MEPS) data found that the average unadjusted yearly total health expenditures for hybrid models were $8,432. Expenditures were significantly lower than standard care at $9,850 but were higher compared to standalone ACOs ($8,399) and standalone PCMHs ($7,580).

After adjusting for socioeconomic factors, total health expenditures were also 12 percent and 25 percent lower in the ACO and PCMH cohorts, respectively, compared to the group of patients treated in a hybrid model. Although there was no difference between other cohorts in average per capita inpatient expenditures. Outpatient expenditures, however, were 16 percent and 30 percent lower in the ACO and PCMH cohorts, respectively.

There was no difference in average per capita outpatient expenditures between the hybrid and standard care cohorts, researchers added.

The reason why two models that have been linked to savings do not generate greater savings when combined could be the “additive effects of operational and implementation challenges of the stand-alone models,” researchers stated.

“ACO and PCMH are associated with significant challenges including organizational structure, culture change, employee and leadership buy-in, operational changes, and administrative resource mobilization, to name a few,” they wrote in the study. “These challenges may be standing in the way of hybrid models achieving their intended outcomes and performing to their full potential.”

Additionally, inconsistent distribution of hybrid models throughout the nation may result in diverse risk profiles and consequently savings, researchers added.

A 2019 evaluation of how state Medicaid agencies leverage PCMH programs in ACO model development found significant variation in participants served under hybrid Medicaid arrangements among different states. For example, approximately 80 percent of Vermont’s Medicaid ACO population received care at a provider under a hybrid model, while just 38 percent of Maine’s Medicaid enrollees were treated through a hybrid model.

ACOs and PCMHs oftentimes operate hand in hand due to their shared goals.

According to the Agency for Healthcare Research and Quality, a PCMH is a “model of the organization of primary care that delivers the core functions of primary health care.” It accomplishes this through five functions and attributes: comprehensive care, patient-centeredness, coordinated care, accessible services, and quality and safety.

The PCMH model complements the ACO, which primarily serves as a value-based reimbursement model that alters the fee-for-service payment structure to hold providers accountable for outcomes.

Coordinated, comprehensive primary care through a PCMH can lead to quality improvements and lower costs, resulting in shared savings for the ACO. For this reason, many providers are opting to get a PCMH certification and enter ACO contracts with payers.

In fact, of the 3,421 patients analyzed in the study, the majority (1,219 patients) were part of a hybrid model versus a standalone ACO (1,096 patients), standalone PCMH (355 patients), and standard care (761 patients).

But opting for both PCMH certification and an ACO contract may not be the most effective path for providers aiming to reduce costs and maximize shared savings, at least for now.

“Future research should explore the outcomes of hybrid models compared with stand-alone models and identify opportunities to reduce operational and implementation burden,” researchers stated. “With significant overlap in the goals, similar consolidation of certification requirements (PCMH) and contractual obligations (ACO) may alleviate administrative and implementation burden on participating practices.”