As part of his continuing studies in economics and statistics, Mr. Aoun has prepared the following papers:
Does Size Really Matter? An Analysis of the Relationship between ACO Size and Financial Success
The 2017 financial performance of Medicare Accountable Care Organizations (“ACOs”) varied considerably, with some ACOs generating multi-million dollar savings and others producing losses. The conventional view is that ACOs that have a larger number of beneficiaries are more likely to be successful. Drawing from a sample of the 2017 actual ACO financial results, this paper examines the relationship between ACO size and financial success. Following an analysis of correlation, this paper finds that, contrary to the conventional view, there is not a strong positive correlation between these two variables. The advantages associated with economies of scale (in terms of spreading administrative costs across a larger population or gaining leverage in negotiating discounts with providers) do not measurably impact success in the program as currently structured. Although large ACOs may not be more likely to achieve financial success than non-large ACOs, they do enjoy greater predictability in health care costs.
Variation in Hospital Performance Under the Medicare Value-Based Purchasing Program
The Medicare Hospital Value-Based Purchasing (HVBP) Program was established under the Affordable Care Act as a way to incentivize hospitals to provide efficient, high quality care. Hospital performance under the HVBP program varies considerably. Because program performance ultimately affects the amount Medicare pays for hospital services (the largest category of health expenditures), it is important for hospitals and policymakers to have a good understanding of the factors that explain this variation. Drawing from a sample of the most recent HVBP performance results (n = 2,487), this paper examines the extent to which different hospital characteristics – such as the bed size, ownership structure and patient mix – explain the variation in performance. This paper also contributes to existing research on the relationship between hospital spending and quality. Analysis of the most recent performance results supports the proposition that higher spending is not necessarily associated with higher quality. In fact, higher spending was observed to be associated with a slight reduction in quality (p-value <.035). This paper concludes with an analysis of the likelihood of receiving a penalty in the HVBP program based on certain characteristics. Some have asserted that hospitals treating a higher proportion of patients with low socio-economic status are more likely to be penalized by Medicare’s incentive programs, and the most recent program results provide credible evidence to support this claim.
Committed to Excellence