Accountable care organizations stand to profit if they can successfully control the cost and quality of medical care, something greatly influenced by where and how often patients receive treatment.
So, ACOs are seeking to control—or at least influence—that traffic. While some seek to nudge patients with lower co-pays and deductibles to hospitals and doctors inside the ACO, others work with commercial insurers that limit the network to ACO doctors and hospitals.
That is the case with Dignity Health, San Francisco, which has touted $95 million in savings over four years for the California Public Employees Retirement System in a narrow network ACO with Hill Physicians Medical Group.
But Medicare ACOs, of which there are more than 350, are not allowed to restrict patients' choice of providers. So, the John C. Lincoln ACO sought to influence physicians instead.
Early evidence from the John C. Lincoln network suggests some benefits for the ACO and preferred doctors. Subspecialists on the preferred list are less likely to repeat expensive screening or diagnostics, for example.
Meanwhile, directing patient referrals has boosted preferred specialists' share of referrals out of the ACO, which includes 12,000 Medicare patients. That's notable considering that patients are not required to follow a referral.
But significant challenges remain. One referral may lead to another, as specialists further refer patients to additional physicians, something over which the ACO has no control, Anspach said. The Arizona system also sees an annual exodus of elderly patients each summer, as they flee 100-plus degree temperatures for more moderate climes. As a result, 20 percent of the ACOs' specialty costs occur outside its region where it has no control over costs or referrals.
ACOs may not fully recognize the potential role referrals play in healthcare quality and spending, Harvard University researchers argued in JAMA this month.
“In general, people recognize that they are important for the quality of care we provide, the quantity of care we provide and that they're also important for prices,” said Dr. Zirui Song, the paper's lead author. But referrals are poorly understood and understudied, he said.
Research has highlighted wide variation in referral rates. One 2003 study found higher volumes of referrals correlated with spending variation across the U.S. Patients saw inpatient specialists 2.4 times as often where spending was highest. Referrals to high-priced providers also drive up spending, he said. Poorly managed referrals can create lapses in care.
“We don't have an accurate understanding of how frequently referrals occur, we know even less about who refers to whom and for what conditions, and we know even less than that about the value of care that a referral leads to,” Song said.
He called for greater study by providers of referral patterns.
Even within narrow network ACOs, organizations can identify potential variation among specialists. That was the case for Dignity Health, which examined the length of stay as a measure of efficiency and quality among four hospitals in its ACO and found wide variation, said Stephen Foerster, the system's vice president of managed care.