Impact of a commercial accountable care organization on prescription drugs

The Longitudinal Impact Of A Multistate Commercial Accountable Care Program On Cost, Use, And Quality

The prevalence of accountable care organizations (ACOs) has grown significantly across Medicare and commercial payers in the past decade, but there are limited insights regarding the effect of ACOs on costs in the commercial population. We used longitudinal administrative claims data over the course of nineteen calendar quarters from 2016 to 2021 to assess the ongoing incremental impact of Elevance Health's commercial ACO program on cost and use across fifteen US states. We also analyzed the program's impact on spending subcategories (inpatient, outpatient, professional, and pharmacy) and measured differences in quality performance. The program was associated with incremental savings during this period. Incremental savings were greater in the fully insured population relative to the administrative services only population and were due to outpatient and pharmacy savings. ACO providers had superior quality performance measures relative to contracted providers not participating in ACOs. Payers should be aware of the potential for diminishing marginal returns of ACO contracting on containing health care costs.

Impact of a commercial accountable care organization on prescription drugs

OBJECTIVE

To determine the long-run impact of a commercial accountable care organization (ACO) on prescription drug spending, utilization, and related quality of care.

DATA SOURCES/STUDY SETTING

California Public Employees' Retirement System (CalPERS) health maintenance organization (HMO) member enrollment data and pharmacy benefit claims, including both retail and mail-order generic and brand-name prescription drugs.

STUDY DESIGN

We applied a longitudinal retrospective cohort study design and propensity-weighted difference-in-differences regression models. We examined the relative changes in outcome measures between two ACO cohorts and one non-ACO cohort before and after the ACO implementation in 2010. The ACO directed provider prescribing patterns toward generic substitution for brand-name prescription drugs to maximize shared savings in pharmacy spending.

DATA COLLECTION/EXTRACTION METHODS

The study sample included members continuously enrolled in a CalPERS commercial HMO from 2008 through 2014 in the Sacramento area.

PRINCIPAL FINDINGS

The cohort differences in baseline characteristics of 40 483 study participants were insignificant after propensity-weighting adjustment. The ACO enrollees had no significant differential changes in either all or most of the five years of the ACO operation for the following measures: (1) average total spending and (2) average total scripts filled and days supplied on either generic or brand-name prescription drugs, or the two combined; (3) average generic shares of total prescription drug spending, scripts filled or days supplied; (4) annual rates of 10 outpatient process quality of care metrics for medication prescribing or adherence.

CONCLUSIONS

Participation in the commercial ACO was associated with negligible differential changes in prescription drug spending, utilization, and related quality of care measures. Capped financial risk-sharing and increased generics substitution for brand names are not enough to produce tangible performance improvement in ACOs. Measures to increase provider financial risk-sharing shares and lower brand-name drug prices are needed.