Market and Organizational Factors Associated with Hospital Leadership of Accountable Care Organizations

Abstract

Background:

The number of Accountable Care Organizations (ACOs) in the U.S. has been rapidly increasing during the past decade. Despite the growth of Accountable Care Organizations (ACOs), little is known about the factors that are associated with hospital leadership of ACOs that contract with public and private payers.

Purpose:

Using a resource dependency framework, this study examines the organizational characteristics and environmental factors that are associated with hospitals who are leading an ACO.

Methodology:

We used the data from the American Hospital Association (AHA) Annual Survey of Hospitals for 2018, the Area Health Resources Files and the Medicare Cost Reports. A multiple logistic regression was used to test associations of the independent variables with the hospital leadership of ACOs.

Results:

We found that nearly one third of the hospitals studied were leading an ACO. System affiliated and not-for-profit hospitals were more likely to be the leaders. Hospitals that lead an ACO offer more clinical services and have better financial performance. Metropolitan core-based statistical areas and per capita income were significantly positively associated with leading an ACO. However, the proportion of population aged 65 and over and the percentage of Medicare advantage penetration were significantly negatively associated with leading an ACO.

Conclusions:

Hospitals vary in leading an ACO, which may provide critical resources for them by creating an infrastructure that enables accountable care, extends their services into population health and value-based care programs increasingly promoted by public and commercial payers.

Keywords:

• ACO
• hospital
• leadership

Acknowledgement

The authors extend their sincere gratitude to Michael J. McCue, DBA, for enabling access to the American Hospital Association Annual Survey of Hospitals data, and for his support of our research.

Funding

The author(s) reported there is no funding associated with the work featured in this article.

Notes

1 “Operating margin ratio, calculated as the difference between net patient revenue and operating expenses divided by net patient revenue, assesses the earnings generated from patient care services. The mean margin of −0.057 or −5.7% indicates that, on average, the sample hospitals spend slightly more operating expenses than net patient revenue, and for every dollar the hospitals spend, they lose about 5.7 cents.”