Original Research2 July 2019
An Instrumental Variable Analysis
    Author, Article, and Disclosure Information
    Background:

    Accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) are associated with modest savings. However, prior research may overstate this effect if high-cost clinicians exit ACOs.

    Objective:

    To evaluate the effect of the MSSP on spending and quality while accounting for clinicians' nonrandom exit.

    Design:

    Similar to prior MSSP analyses, this study compared MSSP ACO participants versus control beneficiaries using adjusted longitudinal models that accounted for secular trends, market factors, and beneficiary characteristics. To further account for selection effects, the share of nearby clinicians in the MSSP was used as an instrumental variable. Hip fracture served as a falsification outcome. The authors also tested for compositional changes among MSSP participants.

    Setting:

    Fee-for-service Medicare, 2008 through 2014.

    Patients:

    A 20% sample (97 204 192 beneficiary-quarters).

    Measurements:

    Total spending, 4 quality indicators, and hospitalization for hip fracture.

    Results:

    In adjusted longitudinal models, the MSSP was associated with spending reductions (change, −$118 [95% CI, −$151 to −$85] per beneficiary-quarter) and improvements in all 4 quality indicators. In instrumental variable models, the MSSP was not associated with spending (change, $5 [CI, −$51 to $62] per beneficiary-quarter) or quality. In falsification tests, the MSSP was associated with hip fracture in the adjusted model (−0.24 hospitalizations for hip fracture [CI, −0.32 to −0.16 hospitalizations] per 1000 beneficiary-quarters) but not in the instrumental variable model (0.05 hospitalizations [CI, −0.10 to 0.20 hospitalizations] per 1000 beneficiary-quarters). Compositional changes were driven by high-cost clinicians exiting ACOs: High-cost clinicians (99th percentile) had a 30.4% chance of exiting the MSSP, compared with a 13.8% chance among median-cost clinicians (50th percentile).

    Limitation:

    The study used an observational design and administrative data.

    Conclusion:

    After adjustment for clinicians' nonrandom exit, the MSSP was not associated with improvements in spending or quality. Selection effects—including exit of high-cost clinicians—may drive estimates of savings in the MSSP.

    Primary Funding Source:

    Horowitz Foundation for Social Policy, Agency for Healthcare Research and Quality, and National Institute on Aging.

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