# Assessing the Effects of Accountable Care Organizations on Surgical Spending and Quality

> **NIH AHRQ R01** · UNIVERSITY OF MICHIGAN AT ANN ARBOR · 2020 · $347,557

## Abstract

PROJECT SUMMARY
Surgical spending accounts for 30% of national health spending and is growing more rapidly than spending in
other key healthcare sectors. Many hope that payment reforms included in the Patient Protection and
Affordable Care Act will help curtail such spending growth. Chief among these reforms were provisions for
establishing accountable care organizations (ACOs). By encouraging deeper health system integration and
greater financial stewardship, proponents believe that ACOs will enhance care coordination and reduce the
use of unnecessary services, ultimately improving quality and lowering health spending. However, the net
effects of ACOs on surgical care remain unclear. On the one hand, ACOs incentives may motivate clinicians to
consider cheaper alternatives to surgery in pursuit of lower population expenditures. On the other hand, shared
saving agreements could have unintended consequences. For example primary care providers (PCPs) with
ACO contracts may place too much emphasis on surgeons' costs, ignoring their quality, when making referral
decisions. Moreover, economic pressures may lead surgeons, who rely on ACO PCPs for a steady stream of
patients, to withhold costly but valuable care. In addition, important contextual factors may moderate ACO
effects. For instance, ACOs frequently do not encompass surgeon practices and ambulatory surgery centers,
where a growing share of surgical care is delivered. If these surgical providers are weakly connected to the
PCP groups accepting collective accountability, ACOs' influence on them may be attenuated. In this context,
we propose a study to better understand the impact that ACOs have on surgical care. Our proposal has the
following three Specific Aims. To determine the impact that ACOs have on surgical spending and quality.
Using the national Medicare population, we will identify eligible beneficiaries aligned with a Medicare ACO and
those that are not. We will then compare surgical and overall expenditures among these beneficiaries before
and after ACO formation. For beneficiaries who undergo surgery, we will also assess their perioperative
outcomes and total episode payments. Aim 2: To evaluate for clinical heterogeneity in ACO effects on
surgical care delivery. We will identify subsets of Medicare beneficiaries from Aim 1 with one of six conditions
for which surgery is considered a treatment. We will then evaluate for differences in surgical spending on
higher, intermediate, and lower value surgical procedures among these beneficiaries before and after ACO
formation. Aim 3: To assess how heterogeneity in policy implementation affects surgical care delivery.
Using linked data from the National Survey of Accountable Care Organizations and network analytical tools,
we will assess how financial risk and organizational structure (including surgeon participation) moderate ACO
effectiveness. Findings from our study will be directly relevant to the Agency for Healthcare Research &
Quality's...

## Key facts

- **NIH application ID:** 10003303
- **Project number:** 5R01HS024525-05
- **Recipient organization:** UNIVERSITY OF MICHIGAN AT ANN ARBOR
- **Principal Investigator:** John Malcolm Hollingsworth
- **Activity code:** R01 (R01, R21, SBIR, etc.)
- **Funding institute:** AHRQ
- **Fiscal year:** 2020
- **Award amount:** $347,557
- **Award type:** 5
- **Project period:** 2016-09-30 → 2022-09-29

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/10003303

## Citation

> US National Institutes of Health, RePORTER application 10003303, Assessing the Effects of Accountable Care Organizations on Surgical Spending and Quality (5R01HS024525-05). Retrieved via AI Analytics 2026-05-22 from https://api.ai-analytics.org/grant/nih/10003303. Licensed CC0.

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