Collaboration Structures in Integrated Healthcare Delivery Systems: An Exploratory Study of Accountable Care Organizations

Abstract

Problem definition: This study explores the performance implications of collaboration structures in an integrated healthcare delivery system, namely, an accountable care organization (ACO). ACOs consist of providers from various stages of the care continuum (preacute, acute, and postacute) that voluntarily assume collective responsibility for the quality and cost of care for a defined patient population. Academic/practical relevance: ACOs’ unsatisfied outcomes are largely due to a lack of provider collaboration. There is a dearth of empirical studies on how to develop collaboration structures. Studies in the healthcare operations management primarily have focused on collaboration within a single organization, shedding little light on this problem. We address this issue by exploring two distinct dimensions of collaboration: partnership scope and scale. Partnership scope measures the presence of providers from the preacute, acute, and/or postacute care-continuum stages, whereas partnership scale measures the presence of providers within a single care-continuum stage. Methodology: We assemble a unique data set of provider types, collaboration structures, and system-level performance for 528 Medicare Shared Savings Program (MSSP) ACOs from 2013–2016. To investigate the impact of partnership scope and scale on ACO performance, we then use econometric estimation approaches that account for endogeneity in collaboration structure decisions. ACO performance is measured by experiential quality and 30-day readmission rates. As additional tests, we also investigate our research questions by assembling data sets at both the hospital level (20,975 hospital-year panel data spanning 2009 to 2015) and patient level (859,145 Medicare patients admitted to 39 California hospitals over a four-year period from 2012 to 2015). Results: We find that synergies exist between partnership scope and scale with respect to ACO performance. Specifically, an average-sized ACO can realize 3.2% more improvement in experiential quality and a 6.6% greater reduction in 30-day readmission rates through partnership scope and scale synergies in the preacute care stage. We also show that the benefits of increasing partnership scope are consistent across providers and patient-level analysis. Further, we find that these benefits come at some cost, suggesting an initial cost-quality trade-off when developing collaboration structures. Managerial implications: Our results offer important insights into the healthcare operations management literature on designing effective healthcare delivery systems extending beyond a single organization.