Insurer partnerships with physician-led ACOs lead to cost savings

Photo credit: Shutterstock/Rice University

A new study finds cost-saving opportunities in partnerships between insurers and physicians designed to improve care coordination and boost efficiencies.

Researchers at Rice University looked at an arrangement made as part of Cigna’s Collaborative Accountable Care initiative between the insurer and a multi-clinic physician practice based in north Texas. As part of the arrangement, Cigna provided an “upfront care coordination fee” in addition to standard fee-for-service payment, in order to help the physicians improve their infrastructure in ways aimed at improving care quality and reducing costs. The study’s findings, published in the American Journal of Managed Care, show estimated average net cost savings of 5.7 percent after two years of the program.

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

Previous studies of coordinated care, such as those focused on the Affordable Care Act’s Accountable Care Organizations (ACOs) have demonstrated mixed results, according to study co-author Vivian Ho, Ph.D., chair of health economics at Rice University’s Baker Institute for Public Policy and director of the institute’s Center for Health and Biosciences.

Striking an agreement directly with physicians could be one of the keys to the program’s success. “Hospitals may have less incentive to restrain cost growth because so much of their revenue comes from providing inpatient care. In contrast, the share of physicians’ revenues associated with hospital care is much lower,” said Ho in an announcement accompanying the article.

Cigna’s investment paid for provision of improved patient data and additional nursing support for following up with patients, which keeps physicians more focused on efficient care delivery, according to Ho. Whether the cost savings stem from upfront funding, the focus on a physician-owned ACO rather than one led by a hospital, or some combination of the two,remains an open question, according to the report. Study authors suggest future research must target each mechanism individually in order to tease out best practices for similar collaborative partnerships going forward.

Suggested Articles

Shareholders have given the OK to Centene’s planned purchase of rival WellCare. 

After months of legal back-and-forth, UPMC and Highmark have reached a long-term network agreement. 

New York's Northwell Health is teaming up with technology company NowPow to tackle nonmedical needs among its Medicaid patients.