Are Networks Key to Solving America’s Healthcare Crisis?, Examining the Performance of Medicare Accountable Care Organizations (ACOs)

Abstract

Medicare Accountable Care Organizations (ACOs) were formed through provisions of the Affordable Care Act (2010) and are designed to reduce healthcare spending while improving care quality. Each ACO is a voluntary group of healthcare providers (e.g., physicians, hospitals, clinics) that agree to coordinate care for a group of patients. To better understand heterogeneity in ACO performance, we use network analysis to conceptualize ACOs are collaborative networks of organizations. Using patient-sharing data from more than 70 million pairs of physicians, we construct interorganizational networks for 250 ACOs from 2012 to 2015. We find that, generally, network disconnectedness--absence of connections between subgroups of connected ACO members--is associated with worse ACO performance. However, we also find that this association is moderated by the strength of network ties and the presence of teaching hospitals. In conclusion, our results suggest that while fragmentation among providers is, as expected, correlated with worse group-level performance, there may be various paths to healthcare improvement based on the idiosyncrasies of each ACO.