Downside ACO Contracts Are Increasing. The Problem: Not By Much.

Elliott Fisher and his Dartmouth colleagues find "relative stagnation" in ACO downside contracts

The percentage of ACOs taking on downside risk has increased only modestly since 2012, according to survey results analyzed by Dartmouth researchers, including Elliott S. Fisher, who is credited with developing the ACO model.

Using data from the National Survey of Accountable Care Organizations, Fisher and his colleagues found that 33% of ACOs reported having at least one downside ACO contract in 2018, an increase of just five percentage points from 2012, when 28% reported having a downside risk contract.

The number of ACOs has grown and with that growth so has the number of Americans attributed to them (32.7 million last year, according to the Dartmouth researchers). In absolute terms, the number of Americans affected by the incentives in downside risk contracts has increased substantially.

But for ACO proponents, the inching up of the proportion taking on downside risk is a disappointment because of the belief (and evidence) that downside risk is crucial if ACOs are to make a serious, value-based dent in the cost of American health care.

Kristen Peck (the lead author), Fisher, and their colleagues dug deeper into the data to make a number of comparisons between ACOs with downside risk contracts and those without. They found that the ACOs with downside contracts were larger (an average of 1,210 participating physicians vs. 441), more likely to be an integrated delivery system (58% vs. 42%), and less likely to be physician owned (30% vs. 39%).

Peck, Fisher, and the others reported their results in the July issue of Health Affairs.