Relationships between physicians and hospitals have changed considerably over the past decade as hospitals and physician groups integrate and new public and private payment policies create financial interdependence. The extent to which accountable care organizations (ACOs) involve hospitals in their operations may prove to be vitally important because managing hospital care is a key part of improving quality and lowering cost growth. Using primary data on ACO composition and capabilities paired with hospital characteristics, we found that 20 percent of US hospitals were part of an ACO in 2015, and hospitals that were in urban areas, non-profit, or had a smaller share of Medicare patients were more likely to participate in ACOs compared to other ACOs. Qualitative data identified several advantages of including a hospital in an ACO: the availability of start-up capital, advanced data sharing, and engagement of providers across the care continuum. Although ACOs that include hospitals (63 percent of ACOs) offered more comprehensive services compared to ACOs without hospitals, we found no differences among ACOs in their ability to manage hospital-related aspects of patient care.
In the past few decades there has been a trend of physicians moving from smaller to larger group practices. We found that this trend continued in the period 2013-15. Primary care physicians have made this change at a much faster pace than specialists have.
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