Jeff Rowe, Editor, Future Care

Jeff Rowe is the editor of Future Care and a veteran healthcare journalist and blogger who has reported extensively on initiatives to improve the healthcare system at the local, regional and national level.

Researchers: smaller ACOs tend to be more efficient than larger counterparts

March 16, 2017 AT 9:11 PM

Accountable care organizations (ACOs) are one of the types of systems whose performances can be enhanced by the use of health IT, but it seems that’s more likely if the ACO is on the small side.

According to Indranil Bardhan, professor of information systems at The University Of Texas at Dallas, who headed a team that conducted a three-year study of the performance of 400 accountable care organizations, “The larger the size of an ACO, the more likely it is to be inefficient.” 

In the study’s model, Bardhan recently told HealthcareIT News, across the entire set of 400 ACOs, the researchers found that a 1 percent increase in health IT usage was associated with a 0.5 percent increase in the level of efficiency. 

“Health IT helps to improve the efficiency of an ACO,” Bardhan added. “What we found was that health IT serves as a coordinating mechanism that allows providers in an ACO to coordinate their care and provide better services, which improves the overall efficiency of the ACO. Health IT has a positive moderating effect on the relative performance of ACOs.”

That said, while it is easy to measure performance in the hard sciences, Bardhan said that measuring the relative performance of an organization can be tricky.

“Unlike in the hard science of physics, there is no absolute measure of performance; when you are comparing organizations, it is all relative to each other – how is one ACO doing against another ACO that is best-in-class?” he said. “So we use a technique that is fairly well known in the literature of operations research, it’s called data envelopment analysis, a mathematical modeling technique that allows you to compute the relative performance and efficiency of ACOs and measure them against each other.”

Bardhan will be discussing ACOs and population health issues at the HIMSS and Healthcare IT News Pop Health Forum in Boston, April 3-4, 2017 at the Westin Copley Place.