Publication
Article
The American Journal of Managed Care
Author(s):
A higher percentage of accountable care organization (ACO) primary care providers was associated with physician leadership, upside financial risk, and financial compensation of physicians tied to performance measures.
ABSTRACT
Objective: To assess the association between the organizational structure of accountable care organizations (ACOs) and provider workforce composition. Quantifying these relationships may improve understanding of factors contributing to changes in the health care workforce in ACOs and improve clinician recruitment and retention across ACOs to help them succeed in the program.
Study Design: Cross-sectional study of 409 ACOs from the National Survey of Accountable Care Organizations Wave 4 (2017-2018; response rate, 48%).
Methods: We evaluated ACO provider workforce composition. In multivariable linear regression models, we examined the relationship among ACO provider workforce composition, contract type, structure, and financial risk level. For Medicare Shared Savings Program participants, we also assessed the role of the market environment.
Results: We found that provider workforce composition varied across organizations by ACO contract payer. The percentage of primary care providers—physicians and nonphysician providers—was higher in smaller organizations with ACO contracts from a single public payer (77.7% for those with Medicaid-only contracts; 59.5% with Medicare-only contracts) relative to larger organizations with contracts from a single commercial payer (52.4% primary care providers) or multiple payers (54.8%-55.7%). A higher percentage of primary care providers in the ACO was associated with physician leadership, upside financial risk, and financial compensation of physicians being tied to performance measures.
Conclusions: With payers’ recent interest in more capitated payment models, larger ACOs should consider extending more population-based payments, provider engagement, and compensation strategies to engage aligned providers toward high quality and low costs, mitigate overall provider turnover, and make participation in ACOs sustainable.
Am J Manag Care. 2025;31(4):in Press
Takeaway Points
Amid the increase in the percentage of primary care providers in the Medicare accountable care organization (ACO) workforce due to recent rapid growth in advanced practice providers, we assessed the role of organizational characteristics and structural and environmental factors on the provider workforce composition of Medicare and non-Medicare ACOs.
The rapid expansion of the accountable care organization (ACO) program implemented by CMS in 2012 has resulted in different types of health care organizations participating in this value-based payment model.1,2 The ACO model encourages providers to coordinate patient care across the continuum and financially rewards participants through shared savings for containing costs while improving the quality of care. With heterogeneity in organizational characteristics and structure among ACO participants,3 little is known about what characteristics and structural and environmental factors are associated with the provider composition of Medicare and non-Medicare ACOs.
In Medicare ACO contracts, beneficiaries are often attributed to organizations based on their use of primary care services from eligible providers,4,5 making primary care important for this advanced payment model. Recently, there has been an increase in the percentage of primary care providers in Medicare ACOs, likely due to recent rapid growth in advanced practice providers who became eligible for beneficiary attribution in 2016.6 The percentage of participating specialty providers has decreased, which may reflect ACOs strategically changing their clinician workforce composition to move away from higher-risk and costly patients7 in efforts to treat their patients with chronic conditions8,9 or integrate specialty care into primary care delivery.10
ACO participants could change their provider workforce composition over time to reflect or change the way they deliver care to meet quality and cost targets. The type of organizations participating in ACOs (eg, single vs multispecialty groups, safety-net providers or hospital systems) determines the type of services provided and will therefore determine clinician specialties in these organizations. Primary care practices and safety-net providers will likely have a higher percentage of primary care providers than specialty medical groups or hospitals. Furthermore, geographic location and characteristics of populations living in certain areas may also influence physician participation in ACOs. With greater ACO formation and physician participation in ACOs in more affluent areas11,12 and disproportionate distribution of primary care providers in rural areas compared with specialty care physicians,13 ACOs located in disadvantaged communities will likely have a higher percentage of primary care providers. Additionally, organizational factors, including nonfinancial incentives such as working conditions14 and opportunities for professional development, remain important factors that will affect workforce composition in ACOs through motivation and retention of health care providers. Offering nonfinancial rewards and bonuses to physicians15 may be important in changing physician behavior and motivating these physicians to remain in the organization. Higher care delivery capabilities may increase providers’ ability to better coordinate care and make ACO targets more attainable.
Value-based payment contracts, which use alternative payment models tied to quality and cost of care, have gained popularity over the years.16 As these contracts expand, understanding how organizations with different provider composition profiles leverage financial17 and nonfinancial incentives while considering environmental context (eg, patient population sociodemographics, supply of providers)18,19 is important for informing future ACOs. This is particularly critical because CMS has aimed to have 100% of traditional Medicare and the majority of Medicaid beneficiaries in accountable care relationships by 2030. Quantifying these relationships may improve understanding of factors contributing to the changing health care workforce in ACOs and improve clinician recruitment and retention across ACOs to succeed in the program.
STUDY DATA AND METHODS
To examine the organizational and environmental factors associated with ACOs’ workforce composition, our primary data source was the National Survey of Accountable Care Organizations (NSACO) Wave 4 (eAppendix 1 [eAppendices available at ajmc.com]). We broadly refer to ACOs as organizations with meaningful accountability for total cost of care and quality in a contract with a payer.20 For the subset of Medicare Shared Savings Program (MSSP) participants for whom we could identify the state with the most attributed beneficiaries from the program (performance year financial and quality results) public use files published by CMS, we linked state-level data on market factors from 3 additional data sources: the Dartmouth Atlas, National Physician Compare, and health professional shortage area (HPSA) designations. Whereas earlier waves (1-3) of the NSACO sequentially surveyed participants based on ACO formation dates, Wave 4, fielded in 2017-2018, surveyed all existing ACOs since 2012. Medicare, Medicaid, and commercial ACO participants were identified using public sources through or by data published by CMS, data collected online from the internet, and data collected from Leavitt Partners.20,21 ACO-affiliated leadership personnel (eg, executive directors, vice presidents, CEOs, chief medical officers, medical directors, chief operating officers, directors, account managers) responded to the survey either online or via a paper survey. Survey response rates varied by ACO type, with an overall response rate of 48% (vs a cumulative response rate for Medicare ACOs of 69%, the highest). The survey garnered information on domains examining the structure, contracts, and capabilities of ACO participants. We characterized ACOs by the type of contract held (Medicare, Medicaid, commercial). Some organizations may hold ACO contracts from multiple payers (all public or private payers or a combination of both) or from a single payer (Medicare, Medicaid, commercial).
We used the Dartmouth Atlas data to measure primary care access/utilization and Medicare expenditures adjusted for regional differences in prices at the state level in 2017 (eAppendix 1). The National Physician Compare data set was used to measure the supply of advanced practice providers and physicians with Medicare enrollments by specialty in each state in 2017. Finally, the HPSA data provided information on the geographic and population (eg, low-income) HPSA designations throughout the US.22 A shortage designation identifies an area or population with a shortage in primary health care providers.23
Study Sample
We included all ACOs (commercial, MSSP, Next Generation, and Medicaid) with reported workforce composition data. We analyzed ACOs with data on our outcome and explanatory variables; the analytic sample included 409 ACOs.
Outcome Measures
We obtained outcome measures from NSACO Wave 4, computed for each ACO. The primary outcome included the percentage of full-time equivalent (FTE) primary care providers compared with the total clinical FTE, comprised of primary care and specialty care clinicians, participating in the largest ACO contract. Primary care providers were defined as clinicians through whom patients can be attributed to the ACO, including primary care physicians (PCPs; ie, internists, family medicine, pediatrics, geriatricians), physician assistants, and nurse practitioners.
ACO Characteristics and Market-Level Factors
We categorized explanatory variables into 6 conceptual groups: (1) payer mix and financial risk arrangement, (2) organizational structure, (3) physician performance management and compensation, (4) process improvement capabilities and infrastructure, (5) recruitment and retention activities, and (6) market structure (eAppendix 2).
Using the NSACO, we measured payer mix and financial risk arrangement using 2 variables: the contract payer types held by the ACO and the financial risk level. The contract payer types reported served to further categorize ACOs into 5 mutually exclusive groups, identifying whether they hold an ACO contract with Medicare only, with Medicaid only, with commercial payers only, with any 2 payers (Medicare and Medicaid, Medicare and commercial, or Medicaid and commercial), or with all 3 payers (Medicare, Medicaid, and commercial). The financial risk level was measured with indicator variables for upside, downside, or both.
Organizational structure was assessed using the number of hospitals, primary care medical groups, specialty groups, federally qualified health centers (FQHCs) and rural health clinics, physician-hospital organizations, independent practice associations, and indicators for whether the organization was physician led (vs hospital leadership, joint hospital-physician leadership, or other leadership arrangements) and for whether the ownership of equipment and employing entity of nonphysician staff of the organization were physician owned (vs publicly owned, nonprofit owned, hospital or hospital system owned, privately owned, or other ownership).
We measured physician performance management and compensation with variables for (1) reporting and sharing performance measures on quality or cost with physicians; (2) using one-on-one review and feedback; (3) using individual financial incentives; (4) using individual nonfinancial awards or recognition;(5) determining PCP compensation in the ACO with clinical quality or cost reduction measures, productivity measures (eg, relative value units [RVUs]), base salary, patient satisfaction, other compensation models; and (6) having standardized processes for physician compensation or performance management of PCPs.
Process improvement capabilities and infrastructure were characterized by 2 indicator variables, one for having sought to reduce waste or create efficiencies in processes and the other for using a single electronic health record across all facilities.
We measured recruitment and retention activities with 3 variables: (1) hiring or adding clinicians (including advanced practice providers) since ACO formation; (2) applying Lean, Six Sigma, or other management and process improvement principles and tools to reduce costs and improve care in the primary care setting; and (3) distributing financial rewards from ACO participation directly to physicians (vs being retained by the ACO or allocated across participating member organizations).
Market environment factors from the Dartmouth Atlas, National Physician Compare, and the HPSA data were measured at the state level. Measures included the number of providers; the proportions of PCPs, nonphysician practitioners, and specialty care providers; the total Medicare reimbursements per enrollees with parts A and B coverage; the percentage of Medicare enrollees with annual ambulatory visits to a primary care provider adjusted by age, sex, and race and race-specific rates; and the percentage of rural, partially rural, and nonrural HPSAs in the state.
Statistical Analysis
This was a cross-sectional study, and we characterized provider workforce composition across organizations. We described the relationships among ACO provider workforce composition, contract type, structure, financial risk level, and market environment, and we used multivariable linear regression modeling to examine the organizational-level correlates of the provider workforce composition. We also examined these relationships within the subset of MSSP ACOs and further assessed the market environment in additional regression models. SEs were adjusted for heteroskedasticity.
In sensitivity analyses, we reestimated the regression models above and included indicators for the types of provider organizations the ACOs reported being included in their organization.
In general, characteristics of survey respondents included in our main regression analyses were similar to those of respondents excluded due to missingness in covariates (eAppendix 3).
RESULTS
We averaged characteristics across all NSACO respondents (Table 1). ACOs reported having, on average, 258 primary care providers, 426 specialists, and 1.6 specialists to every 1 primary care provider. The mean percentage of primary care providers was 56.3% across all ACOs. On average, ACOs reported including 6 hospitals, 42 primary care medical groups, and 52 specialty groups. The majority of organizations reported being led by physicians (53.3%); 83.4% of respondents had a Medicare ACO contract, 23.2% had a Medicaid contract, and 72.4% had a commercial contract. Fewer than 1 in 3 ACOs reported having at least 1 contract with downside financial risk (eligible for both shared savings and losses). Among the individual physician performance management strategies reported by ACOs, reporting and sharing performance quality measures with physicians were the most used (97.0% of ACOs), followed by reporting and sharing performance measures on cost with physicians (76.2%). The least used strategy was using individual nonfinancial awards or recognition (46.0%). Many organizations reported using clinical quality measures (75.1% of ACOs) in their PCP compensation models, followed by patient satisfaction (58.9%), productivity measures (55.4%), base salary (43.9%), and cost reduction measures (41.1%). Regarding recruitment and retention activities, 88.2% reported hiring clinicians or adding nonphysician clinicians to their organization after ACO formation, and 54.5% reported distributing financial rewards from ACO participation directly to physicians.
For MSSP ACOs linked to state-level data on market environment, the average number of providers per state was 24,564, including 16.3% PCPs, 21.0% nonphysician providers, and 62.7% medical specialists. On average, 34.9% of HPSAs in each state were nonrural (vs 65.0% rural/partially rural).
When characterizing organizations by payer mix, 36.2% had contracts exclusively with a single payer (Medicare [n = 104], Medicaid [n = 7], or commercial [n = 37]), 48.7% had contracts with any 2-payer combinations (n = 199), and the remaining 15.2% had contracts with all 3 payers (n = 62) (Figure). Organizations with contracts exclusively with commercial or multiple payers tended to be larger and have more primary care providers and specialists. Additionally, the percentage of specialists was relatively higher in ACOs with contracts with commercial or multiple payers, whereas organizations with contracts exclusively with Medicaid tended to include more primary care providers (77.7% primary care providers vs 59.5% in organizations with contracts exclusively with Medicare, 52.4% in those with contracts exclusively with commercial, and 54.8%-55.7% in those with contracts from multiple payers) (eAppendix 4). These differences were not statistically significant due to large SDs.
Pairwise correlation analyses showed that the percentage of primary care providers was significantly and positively correlated with sharing performance measures on cost with physicians, using individual nonfinancial rewards, and using cost reduction measures in PCP compensation models (eAppendix 5).
Because multiple strategies may be utilized simultaneously by an ACO, we examined each of these relationships while holding other factors constant in multivariable linear regression models to assess the correlates of the percentage of primary care providers (Table 2). Variables positively and significantly associated with the percentage of primary care providers included having a Medicaid ACO contract (9.2–percentage point increase vs having any Medicare ACO contract; P = .012) and using base salary in PCP compensation models (6.6–percentage point increase; P = .085). Conversely, factors negatively and significantly associated with the percentage of primary care providers included having an ACO contract with downside financial risk (15.8–percentage point decrease; P < .001) and using productivity measures in physician compensation model (17.1–percentage point decrease; P < .001). These estimated relationships were generally higher in magnitude but remained statistically significant among MSSP ACOs, with a few exceptions. Physician leadership (8.9–percentage point increase; P = .024) and the use of individual nonfinancial rewards (6.2–percentage point increase; P = .078) became significantly or marginally significantly associated with the percentage of primary care providers. After adding market environment measures for MSSP participants, the previously estimated relationships remained robust. Using patient satisfaction in physician compensation (6.8–percentage point increase; P = .091) became marginally significantly and positively associated with the percentage of primary care providers. Market factors significantly and positively associated with the percentage of primary care providers included the total parts A and B Medicare reimbursements per enrollees (0.4–percentage point increase in the percentage of primary care providers for a 1% increase in reimbursements; P = .074) and the percentage of rural HPSAs in the state (0.3–percentage point increase for a 1–percentage point increase in rural HPSAs; P = .003).
Sensitivity analyses showed that including hospitals (13.5-16.3–percentage point decrease; P < .001) or specialty medical groups (22.7-24.4–percentage point decrease; P < .001) in the ACO was negatively and significantly associated with the percentage of primary care providers (eAppendix 6). Including FQHCs or rural clinics (5.9-7.9–percentage point increase; .02 < P < .07) was positively and significantly associated with the percentage of primary care providers.
DISCUSSION
The ACO model is a fast-growing value-based care model, with more than 32 million individuals covered.24 In a cross-sectional analysis, we assessed organizational and environmental factors associated with the ACO provider workforce composition. We found that the percentage of primary care providers (nonphysicians and physicians) averaged 56.3% across all ACOs. Nonetheless, we found greater reliance on primary care providers with a relatively higher percentage of such providers in smaller organizations25 with ACO contracts with a single public payer compared with larger organizations with contracts with a single commercial payer or multiple payers. This was further emphasized in multivariable regression model results, which suggested that having any ACO contract with Medicaid was associated with a 9.2–percentage point increase in the percentage of primary care providers. This difference in distribution of different types of providers and the relationship estimated may be explained by the fact that organizations’ way of delivering care may vary by payers26,27 and the health care needs of their patients. Additionally, it could also be explained by the fact that organizations pursue ACO contracts that best fit their needs and optimize (with hires and other strategies) to ensure savings.
From our data, we observed that the majority of larger organizations had ACO contracts with commercial-only or multiple (public and private) payers, which is consistent with prior findings demonstrating a trend of increase in ACO size,6 in part due to the difficulty of survival for smaller ACOs. The potential gains from greater participation in ACO programs including risk-bearing contracts with multiple ACO contracts are much greater.
The negative and important relationship between greater financial risk and/or downside financial risk and the percentage of primary care providers within an organization also underscores differences in care delivery by the level of financial risk adopted. Prior research had found that ACOs with downside-risk contracts reported more active management of high-need, high-cost patients to reduce avoidable emergency department visits and inpatient stays as well as potentially reduce network leakage28 through specialty care.
Our findings also suggest that physician-led organizations may be driven more by primary care than organizations with other leadership arrangements. This aligns with the fact that physician-led organizations do not typically include a hospital in their payment arrangement or within the broader organization.29
Our findings on the use of productivity measures including RVUs vs base salary in primary care provider compensation suggest that compensation plans for primary care providers engaged in ACOs may recognize the need to spend time on non–RVU-generating activities that support value-based care, such as panel management, quality improvement, and waste management. Although measuring productivity is important in managed care, physician compensation models should combine productivity, clinical quality improvement, and cost reduction measures to reward physicians who provide both efficient and effective care.30 Because the ACO model encourages care coordination across the continuum and participants are financially incentivized to provide efficient care with better clinical quality and reduced costs, it seems natural that such metrics be incorporated into the provider compensation model.
CMS introduced the Primary Care First model—an alternative 5-year value-based payment model that offers capitated payments to support the delivery of advanced primary care—because of the challenges raised during the COVID-19 pandemic.31-33 With this attention given to primary care capitated payments by payers, ACOs may also want to emphasize population-based payment measures (eg, patient panel sizes) that make revenues more predictable but also adjust for patient condition severity in primary care clinician compensation. Larger organizations with a lower proportion of primary care providers may wish to employ these engagement strategies within primary care and potentially with other aligned providers in anticipation of the expansion of value-based contracts.9,34 Nonetheless, newer ACOs may need time to determine which performance management and retention strategies will be most effective.
The positive association between rural HPSAs and the percentage of primary care providers corroborates the fact that such providers are more likely to practice in rural areas than specialty care providers13 and may also suggest that there is less of a shortage of primary care providers in rural vs urban HPSAs.
Limitations
Our study had several limitations. Organizations without Medicare contracts were difficult to identify because there was no official data source of commercial ACO contracts data. For this reason, our results may not be generalizable to organizations with contracts exclusively with commercial payers. Moreover, the study’s cross-sectional nature precludes inferring dynamic relationships and trends over time. Furthermore, we were unable to differentiate advanced practice providers from other PCPs in the survey, but we were able to account for whether organizations hired additional (physician and nonphysician) clinicians to their staff after ACO formation. As with all surveys in which respondents self-report information, there is the potential for response bias. Nonetheless, we expect these biases to be consistent across organizations. We were unable to measure the organizations’ emphasis on the different strategies they reported using, and they may have also used other strategies that better fit their organization’s culture that were not measured in the survey. Variation in measured and unmeasured strategies could lead to differential relationships between these strategies and provider composition across organizations. Finally, our findings from using 2017-2018 survey data reflect the provider workforce composition and organizational characteristics of ACOs during that period. These relationships may change with changes in providers and organizations participating in ACOs over time.
CONCLUSIONS
Provider workforce composition varies across ACOs by contract type payers. The percentage of primary care providers was found to be relatively greater in smaller organizations with ACO contracts with single public payers. A higher percentage of primary care providers was found to be associated with physician leadership, lower financial risk, nonfinancial personal performance management strategies, and financial compensation tied to ACO performance measures. To succeed in this new model of care delivery, ACOs must engage clinicians in activities that improve the quality and cost of care. With the shift in provider workforce composition toward advanced practice providers gaining a growing role in primary care, ACOs should consider extending these strategies in combination with recently favored population-based compensation methods to manage performance and motivate nonphysician clinicians as well. Implementing these changes in compensation for all clinicians eligible for patient attribution may increase motivation, mitigate clinician turnover, make participation in ACO models more sustainable, and make achieving the desired gains in performance and cost containment more attainable.
Acknowledgments
Wave 4 of the National Survey of Accountable Care Organizations was supported by grant 20160616 from The Commonwealth Fund, grant R01MH109531 from the National Institute of Mental Health of the National Institutes of Health, and grant 20249 from the California Health Care Foundation.
The Dartmouth Atlas data were obtained from the Dartmouth Atlas Data website, which was funded by the Robert Wood Johnson Foundation, the Dartmouth Clinical and Translational Science Institute, under award UL1TR001086 from the National Center for Advancing Translational Sciences of the National Institutes of Health, and, in part, by the National Institute on Aging, under award U01 AG046830.
Author Affiliations: Department of Population Health Sciences (MHO, XL), and Rheumatology Division, Department of Medicine (SKF), University of Wisconsin School of Medicine and Public Health, Madison, WI; UW Health ACO (SKF), Madison, WI.
Source of Funding: Supported by a grant from Arnold Ventures (#22-06919). The content of the article is solely the responsibility of the authors and does not necessarily represent the official views of Arnold Ventures.
Author Disclosures: Dr Ferguson was affiliated with UW Health ACO during work on this paper. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
Authorship Information: Concept and design (MHO); acquisition of data (MHO, XL); analysis and interpretation of data (MHO, XL); drafting of the manuscript (MHO, SKF); critical revision of the manuscript for important intellectual content (MHO, SKF); statistical analysis (MHO, XL); obtaining funding (MHO); administrative, technical, or logistic support (MHO); interpretation of results (SKF); and supervision (MHO).
Address Correspondence to: Mariétou H. Ouayogodé, PhD, Department of Population Health Sciences, University of Wisconsin School of Medicine and Public Health, 610 Walnut St, Madison, WI 53726. Email: marietou.ouayogode@wisc.edu.
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