Accountable Care

By Charmaine Girdish, Alina Rossini, Bryce S. Sutton, Alexis K. Parente, and Benjamin L. Howell
doi: 10.1377/hlthaff.2022.00279

The Longitudinal Impact Of A

HEALTH AFFAIRS 41,
NO. 12 (2022): 1795–1803
©2022 Project HOPE—
The People-to-People Health

Multistate Commercial Foundation, Inc.

Accountable Care Program On

Cost, Use, And Quality
Charmaine Girdish (charmaine
ABSTRACT The prevalence of accountable care organizations (ACOs) has .girdish@elevancehealth.com),
Elevance Health, Indianapolis,
grown significantly across Medicare and commercial payers in the past Indiana.
decade, but there are limited insights regarding the effect of ACOs on
costs in the commercial population. We used longitudinal administrative Alina Rossini, Elevance
Health.
claims data over the course of nineteen calendar quarters from 2016 to
2021 to assess the ongoing incremental impact of Elevance Health’s Bryce S. Sutton, Elevance
Health.
commercial ACO program on cost and use across fifteen US states. We
also analyzed the program’s impact on spending subcategories (inpatient, Alexis K. Parente, Elevance
Health.
outpatient, professional, and pharmacy) and measured differences in
quality performance. The program was associated with incremental Benjamin L. Howell, Elevance
Health.
savings during this period. Incremental savings were greater in the fully
insured population relative to the administrative services only population
and were due to outpatient and pharmacy savings. ACO providers had
superior quality performance measures relative to contracted providers
not participating in ACOs. Payers should be aware of the potential for
diminishing marginal returns of ACO contracting on containing health
care costs.

A
ccountable care organizations
(ACOs) were conceptualized more
than a decade ago1 as a type of Al-
ternative Payment Model (APM)
designed to steer health care use
away from traditional fee-for-service incentives.
Under ACOs, provider compensation is tied prin-
cipally to the volume of care delivered. The ob-
jective of ACOs is to introduce greater provider
collaboration and accountability while creating
financial incentives for providers to reduce
spending and use. Since 2012, when ACOs were
originally established as a Medicare fee-for-
service payment model designed to manage
costs, ACO arrangements have broadened into
other lines of business. A study conducted
among US physician practice respondents to
the National Survey of Healthcare Organizations
and Systems in 2017–18 found that 49.2 percent
of 2,061 responding practices reported partici-
pating in three or more APMs simultaneously,
with most participating in pay-for-performance
and ACO models.2 Similarly, the Health Care
Payment Learning and Action Network reports
that the percentage of spending tied to APMs
across commercial health plans, Medicare fee-
for-service, Medicare Advantage, and Medicaid
rose to 40.9 percent in 2019, up from 23 percent
in 2016.3
Over time, the number of ACO contracts has
increased in both the public and commercial
sectors, with much of the growth driven by the
latter. The number of commercial ACO contracts
rose to its highest first-quarter level in 2019, with
54 percent more commercial contracts than
Medicare contracts.4
Knowledge about the effect of ACOs on health
care use and spending is mostly limited to the
Medicare population. Evaluations of early Medi-
care ACOs have shown an association between

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Accountable Care
ACOs and reduced spending.5–7 To date, compar-
atively few studies have evaluated the effective-
ness and spending of ACOs among commercial
members. In addition, most studies have find-
ings that are not generalizable to the US popula-
tion or that have small sample sizes.
Hui Zhang and colleagues evaluated the long-
term impact of commercial ACO contracting in
California on health care spending, use, and
quality outcomes among continuously enrolled
members over the course of a five-year period.8
The authors found that these contracts had a
limited impact on outpatient spending, with
growth in spending slowing by the fourth year
of operation, and they did not detect any sub-
stantial impacts on inpatient cost and use. Zirui
Song and colleagues examined spending and
quality measures during the first eight years of
the Blue Cross Blue Shield of Massachusetts Al-
ternative Quality Contract.9 They found an
11.7 percent relative cost savings, generally
greater quality improvements, and lower use
in outpatient facility settings. Another smaller
study surveying US adults ages 18–64 showed no
significant differences in the use of preventive
care services, adjusted mean total health expen-
ditures, or patient experience between commer-
cial ACO and non-ACO groups.10
As the number of commercial ACOs continues
to grow, more evidence on their performance is
needed. In 2012 Elevance Health (previously
Anthem, Inc.) launched the Enhanced Personal
Health Care (EPHC) program, a large commer-
cial ACO model, which has since been made
available in fifteen states across the US. It is a
standardized cost-of-care model with a quality-
of-care component that allows providers to share
in potential savings and requires them to become
accountable for the cost and quality outcomes of
their attributed patients.
Our study contributes to the existing literature
on the performance of commercial ACOs by pro-
viding a descriptive analysis of EPHC’s perfor-
mance across the US. It focused on evaluating the
potential impact of ACO contracting on health
care cost, utilization, and quality for the Ele-
vance Health commercial population across fif-
teen states between 2016 and 2021. To our
knowledge, this is the first large multistate, lon-
gitudinal study to evaluate the ongoing perfor-
mance of an ACO program from a private payer.
Study Data And Methods
The Enhanced Personal Health Care Pro-
gram EPHC is a value-based payment model of-
fered by Elevance Health to providers (including
both individual providers and groups of pro-
viders, described further below) treating com-
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mercially insured patients. Providers initially be-
came eligible for enrollment in the program in
2012 in six states; since 2015, eligibility has sub-
sequently expanded so that it now encompasses
fifteen states: California, Colorado, Connecticut,
Georgia, Indiana, Kentucky, Maine, Massachu-
setts, Missouri, Nevada, New Hampshire, New
York, Ohio, Virginia, and Wisconsin. Providers
have the potential to share savings under a med-
ical cost target model that is upside-only for most
providers, with a few providers in downside ar-
rangements (representing approximately 20 per-
cent of EPHC membership in 2021). Providers
receive up-front clinical coordination fees to off-
set implementation and care coordination costs,
subject to negotiation with individual providers.
Although specific contracting details are flexi-
ble and can vary across providers, the payment
model is the same for all providers. They are
eligible to share in savings if attributed members
have costs that are lower than projected, but only
if quality is maintained or improved over the
course of a twelve-month period. This quality
requirement ensures that the program’s cost sav-
ings are not achieved at the expense of reduced
quality of care. Elevance Health also offers a
variety of support resources to help providers
reach program goals, including advanced analyt-
ics and direct consultative support for strategy,
quality improvement, care management, and
population health management. Providers must
meet minimum commercial member attribution
criteria, which vary by state, ranging from 5,000
to 10,000 members per year for program eligi-
bility. Patients of participating providers are not
made aware of their provider’s participation in
the program.
Study Design, Data, And Population This
study used a longitudinal design across nineteen
quarters (fifty-seven months) to analyze Ele-
vance Health’s commercial fully insured and
administrative services only populations in fif-
teen states. The data originated from Elevance
Health’s medical and pharmacy commercial
claims database covering the study period be-
tween the third quarter (Q3) of 2016 and Q1 of
2021. We included this range of data because of
the availability of claims in Elevance Health’s
data warehouse. Claims before Q3 2016 were
unavailable for analysis. We analyzed outcomes
using data summarized at the provider-county-
quarter level.
We included members younger than age sixty-
five who were enrolled in an eligible plan and had
sufficient coverage and utilization history to be
attributable to an Elevance Health provider.
Member attribution for most members was de-
fined by an algorithm that assigned members to a
given primary care provider on a quarterly basis
We found incremental
savings in the fully
insured population
from outpatient care.
based on a plurality of claims, using a twenty-
four-month lookback period. For the remaining
members who had specific plans that required
primary care provider designation, attribution
was defined by members’ designations at the
time of benefit enrollment.
EPHC providers were identified at the panel
level, which is often a group of provider Taxpayer
Identification Numbers that have been integrat-
ed into a single provider organization by Ele-
vance Health for the purpose of program con-
tracting. Therefore, the provider panel may
contain multiple Taxpayer Identification Num-
bers and multiple providers. It is at the panel
level that EPHC contracts are typically written.
Because non-EPHC providers are not assigned to
a panel, data for these providers were identified
at the Taxpayer Identification Number level but
subsequently summarized under a single coun-
ty-quarter identifier. A visual illustration of the
identification process is in exhibit A1 in the on-
line appendix.11
We included providers who were contracted
in EPHC in at least one calendar quarter during
the study period and had at least thirty members
in each provider-county-quarter combination.
Non-EPHC providers were subject to the same
minimum member attribution criteria.
We used internal deidentified medical data
for performance measurements and quality im-
provement purposes. Therefore, no Institutional
Review Board review for research on human sub-
jects was required.
Outcomes And Covariates The primary out-
come of our study was average per member per
month total cost based on allowed amount, sum-
marized at the provider-county-quarter level.
We also modeled summarized costs in the follow-
ing spending subcategories: inpatient, out-
patient, professional, and pharmacy. Utilization
outcomes were also summarized as utilization
rates per 1,000 members in the same categories
as for the cost of care. Pharmacy use summaries
were defined as thirty-day-equivalent prescrip-
tions and were calculated by summing total phar-
macy days’ supply per member and then dividing
by 30.We examined the quality measures that are
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included in all Elevance Health providers’ score
cards, which are used to provide feedback on
each provider’s performance in the EPHC pro-
gram relative to their cost and quality targets.
All covariates also were also summarized at
the provider-county-quarter level and included
member age, sex, Diagnostic Cost Groups
(DxCG) retrospective risk score,12 enrollment
in a high-deductible consumer-directed health
plan, exposure to a capitated claim (for example,
episode-based payment), commercial segment
(national, local group, or individual), plan type
(health maintenance organization, point-of-
service plan, or preferred provider organiza-
tion), tiered network, administrative services
only or fully insured funding, prescription cov-
erage, member state, and Area Deprivation
Index.13
Statistical Analysis We applied a set of mul-
tivariate longitudinal regression models to esti-
mate EPHC’s association with quarterly spend-
ing and utilization outcomes. We interacted our
indicator for EPHC participation with time (as a
calendar quarter) to gain insight into the rela-
tionship between EPHC participation and incre-
mental spending and utilization growth for our
members (see functional form in the appen-
dix).11 We modeled these cost and utilization out-
comes, weighted by the number of members in
each provider-county-quarter combination for
both the fully insured and administrative ser-
vices only populations, both separately and over-
all. For each outcome measure and funding cate-
gory, we included nineteen quarters of data from
Q3 2016 through Q1 2021. The predicted values
of these outcomes were produced to generate
differences (EPHC minus non-EPHC) between
the study groups to display trends and to gener-
ate annual averages used to calculate savings
differences overall and by spending subcategory.
We also specified an alternative longitudinal
model for total per member per month spending.
In this model, yearly time indicators instead of
calendar quarters were interacted with the bina-
ry variable for EPHC participation with a base
year of 2016.
To compare quality performance, we mea-
sured the adjusted difference in annual perfor-
mance of each measure between EPHC and
non-EPHC providers by running separate annual
linear models (2017, 2018, 2019, and 2020) and
adjusting for the same covariates included in the
cost and utilization models. All analyses were
conducted using SAS Enterprise Guide 7.15.
Limitations There were several limitations to
our study. First, we were unable to obtain data
from before 2016, although EPHC was first
launched in 2012. Therefore, there may have
been an unmeasured selection bias of providers
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Accountable Care
before participation, and we could not rule out
the possibility of divergent spending trajectories
before our study period. Although we adjusted
for observable characteristics at the unit of anal-
ysis, we could not observe potential selection-
driven differences before 2016. Also, our meth-
ods measured program effects as a linear growth
rate. Additional research with alternative speci-
fications will help better explain the potential
for diminishing marginal returns over time for
ACOs.
We were unable to control for members’ plan
design and other program offerings, including
members’ out-of-pocket payments, deductibles,
network restrictions, and supplementary well-
ness programs that may have been available. This
is mostly a concern for our administrative ser-
vices only population, for which plan designs can
be diverse. However, the greatest savings came
from the fully insured population, for which
members have more standardized plans with less
variability in plan design and other buy-up client
offerings influencing use and costs.
We were not able to adjust for providers that
had potential external contracts with other pri-
vate or public organizations, which may have
had an influence on cost or quality outcomes.
Considering the rise in both public and private
APMs among providers occurring during our
study period,4 it is likely that both our EPHC
and non-EPHC providers had some degree of
external APMs in place. This might not be a crit-
ical concern, considering a recent study that ex-
amined whether physicians who participated in a
Medicare ACO reduced spending among their
commercial patients and that determined that
there was no spillover reduction in spending
among their commercially insured patients.14
Another limitation was related to the size of
EPHC-participating providers—specifically, that
EPHC providers are larger practices. This may be
a result of the recruitment process by local mar-
kets and the need to maintain strategic relation-
ships with providers within those markets. One
concern is that the larger EPHC providers were
formed through provider consolidation and
vertical alignment with health systems. These
trends have been increasing, particularly during
our study period.15 Such consolidation can lead
to higher prices in some settings. The reduction
in market competition can affect the balance of
provider-payer negotiating, resulting in overall
higher costs. However, we observed lower costs
among EPHC providers, and our analysis adjust-
ed for known cost and utilization drivers applied
over the course of several years.
Finally, although we addressed some geo-
graphic generalizability concerns by including
fifteen US states, our study was based on a single
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Based on our quality
analysis, EPHC
providers were
associated with better
medication adherence.
payer. Therefore, the applicability of our find-
ings to other payers is limited, particularly con-
sidering the variation that can exist in payment
arrangements. We present estimates across all
program states while adjusting for the member’s
state, but savings may vary by region, given dif-
ferences in spending and ACO penetration
across US states.16
Study Results
Our analysis included 680 US counties. Summa-
ry data on covariates used in the models are in
appendix exhibit A2.11 A full four quarters of data
were available for each of calendar years 2017–
20. During this period, the EPHC member count
decreased by 4 percent, whereas the non-EPHC
member count declined by 24 percent. EPHC
providers had a greater number of members
per provider relative to non-EPHC providers.
Characteristics of the EPHC population
changed somewhat over time (appendix exhib-
it A2).11 From 2017 to 2020 there was an increase
in the average Area Deprivation Index and the
percentage of EPHC members with tiered net-
works, consumer-directed health plans, and ad-
ministrative services only funding. Average age
decreased slightly (from 35.1 to 33.8 years).
Across both funding sources, EPHC members
were, on average, younger compared with non-
EPHC members, had comparable DxCG risk
scores, and were more likely to be in an admin-
istrative services only plan.We also saw increases
in administrative services only composition and
a corresponding decline in pharmacy coverage.
The administrative services only population,
compared with the fully insured population,
had lower DxCG risk scores (1.75 versus 1.87
in 2020), was slightly younger (33.2 versus
36.0 years), and was less likely to have a consum-
er-directed health plan (21.2 percent versus
26.8 percent) and be in a tiered benefit structure
(17.7 percent versus 45.0 percent) (appendix ex-
hibit A2).11 The fully insured population had
higher total per member per month spending
($611.81 for fully insured versus $479.26 for ad- with spending overall (−$18.25) and with spend-
ministrative services only), which may be par- ing in the fully insured population (−$27.37).
tially explained by the fact that most fully insured However, we did not find a significant effect in
members had pharmacy coverage, which was in- the administrative services only population.
cluded in the total per member per month total The estimates for EPHC-year interaction terms
and was thus a potential source of savings. describe how total per member per month
In contrast, only 30 percent of administrative changed over time for EPHC participants. EPHC-
services only members had pharmacy coverage— year interactions after 2017 for the overall popu-
and therefore costs—that could be included. lation were negative, suggesting that EPHC par-
Exhibit 1 shows quarterly incremental esti- ticipation moderated spending growth over time
mates for total per member per month spending (a declining year-over-year difference in interac-
and spending subcategories. We found quarterly tion terms). However, these interaction terms
total per member per month savings of −$0.52 were not significant. For the fully insured and
overall: −$1.24 for the fully insured population administrative services only populations, EPHC
and −$0.23 for the administrative services only participation was negatively associated with
population. We also found that quarterly in- spending in 2018–20. These results were signifi-
patient per member per month savings were cant for the fully insured population in 2019 and
not significant either overall or by funding 2020 but were not significant for the adminis-
source. We did find significant savings in out- trative services only population. Although the
patient spending overall (−$0.48 per member magnitude of the differences in interaction term
per month savings per quarter), as well as for estimates generally declined over time, tests for
the fully insured population (−$0.76), but not the equality of these estimates year over year
the administrative services only population were not significant except for 2017–18 for the
(−$0.33). We found significant relative profes- fully insured population (p ¼ 0:0284; data not
sional spending increases overall ($0.25 per shown).
member per month) and nonsignificant in- To illustrate the composition of savings (or
creases in the administrative services only losses) by spending subcategories, appendix ex-
($0.23) and fully insured ($0.17) populations. hibit A3 presents the breakdown of total per
We found significant quarterly pharmacy savings
overall (−$0.19 per member per month) and in
the fully insured population (−$0.62) and non-
Exhibit 1
significant savings in the administrative services
only population (−$0.01). Quarterly incremental spending differences between Elevance Health’s Enhanced Personal
Exhibit 2 shows utilization trend effects for Health Care (EPHC) and non-EPHC providers, by spending subcategory and funding source,
inpatient, outpatient, professional, and pharma- third quarter 2016 through first quarter 2021
cy service categories. The inpatient trend effect Spending subcategories Estimated difference in
was not significant overall or for either the fully and funding sources PMPM spending ($) p value
insured or the administrative services only Inpatient
population. We also did not find a significant Overall −0.11 0.3251
incremental effect in outpatient visits per ASO −0.12 0.3629
1,000 overall or for the administrative services Fully insured −0.04 0.7937
only population, but we did find a significant Outpatient
Overall −0.48 0.0043
relative reduction in outpatient visits per 1,000
ASO −0.33 0.1348
(−1.6031) for the fully insured population. Fully insured −0.76 <0.0001
Trends in professional visits were not significant
Professional
overall or for the administrative services only or Overall 0.25 0.0274
fully insured populations. Similarly, we did not ASO 0.23 0.0882
find significant relative increases in prescription Fully insured 0.17 0.1664
use as thirty-day equivalents per 1,000. Pharmacy
Exhibit 3 displays the results of the longitudi- Overall −0.19 0.0006
nal model in which dichotomous variables were ASO −0.01 0.8747
included for EPHC participation and for calen- Fully insured −0.62 <0.0001
dar years 2017–20 (base year 2016). Coefficient Total
Overall −0.52 0.1036
estimates for EPHC show the effect of program
ASO −0.23 0.5587
participation on per member per month spend- Fully insured −1.24 0.0005
ing, yearly indicators show the effect of time, and
EPHC-year interactions show the effect of pro-
gram participation over time.We found that pro- SOURCE Authors’ analysis of Elevance Health claims data. NOTES p values were calculated using
gram participation had a significant association cluster robust standard errors. PMPM is per member per month. ASO is administrative services only.

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 Accountable Care

Exhibit 2 2016 to −$15.20 (3.2 percent) in 2020. Savings

from inpatient and outpatient use constituted
Quarterly incremental utilization differences between Elevance Health’s Enhanced Personal
Health Care (EPHC) and non-EPHC providers, by utilization category and funding source,
the majority of savings, with minimal gains from
third quarter 2016 through first quarter 2021 pharmacy and losses from professional use.
Across nine of seventeen quality measures,
Estimated difference
EPHC providers consistently were associated
Utilization categories and funding sources in utilization p value
with superior performance relative to non-EPHC
Inpatient (admissions per 1,000)
providers in all years (exhibit 4). EPHC pro-
Overall −0.0067 0.2959
ASO −0.0106 0.1327 viders had significantly higher rates of breast
Fully insured −0.0024 0.8000 cancer screening, cervical cancer screening, dia-
Outpatient (visits per 1,000) betes-related testing, childhood immunizations,
Overall −0.1283 0.8032 pediatric well care visits, and proportion of days
ASO −0.0319 0.9562 covered for hypertension. For the remaining
Fully insured −1.6031 0.0041 quality measures, we did not find significant dif-
Professional (visits per 1,000) ferences in performance between EPHC and
Overall 0.8588 0.2862 non-EPHC providers.
ASO 0.9827 0.3263
Fully insured 0.4685 0.6327
Pharmacy (30-day equivalent Rx per 1,000)
Overall 0.6577 0.6464
Discussion
ASO 1.7964 0.1379 This study assessed the performance of ACOs in
Fully insured −0.9688 0.5319 a large commercial population over the course of
an extended period, adding a broad multistate
view to prior commercial plan studies.8,10,17 We
SOURCE Authors’ analysis of Elevance Health claims data. NOTES p values were calculated using found that contracting with EPHC, Elevance
cluster-robust standard errors. ASO is administrative services only.
Health’s ACO, was associated with incremental
cost savings, particularly in the fully insured
population. Furthermore, EPHC providers were
member per month spending by year and fund- associated with superior or equivalent perfor-
ing source.11 For fully insured populations, the mance across all quality measures, suggesting
savings ranged from −$25.42 per member per that the observed cost savings did not compro-
month (or 5.0 percent of mean annual EPHC mise the quality of care.
total per member per month; data not shown) We found incremental savings in the fully in-
in 2016 to −$44.08 per member per month sured population from outpatient care. Initial
(8.3 percent) in 2020. Savings from outpatient savings potential may exist in this setting in
and pharmacy use increased across the study the form of reduced use of low-value services
period at the expense of inpatient and profes- or the steering of members to lower-cost sites.
sional use, where the latter contributed to losses. It was outside the scope of the study to examine
For administrative services only, we found that the precise mechanism of savings. However, it is
savings increased from −$11.74 (2.6 percent) in possible that providers implemented strategies

Exhibit 3

Estimated relationships between Elevance Health’s Enhanced Personal Health Care (EPHC) program participation, program
year, and per member per month spending, by funding source, third quarter 2016 through first quarter 2021
Overall Fully insured Administrative services only
Variables Estimate ($) p value Estimate ($) p value Estimate ($) p value
EPHC −18.2521 0.0002 −27.3688 <0.0001 −11.8081 0.0128
2017 5.2243 0.0051 0.7687 0.8090 6.7735 0.0007
2018 22.2421 <0.0001 12.8591 0.0158 20.5421 <0.0001
2019 37.4610 <0.0001 27.5981 <0.0001 34.3045 <0.0001
2020 11.8261 0.0109 −1.2352 0.8321 9.4705 0.0541
EPHC × 2017 2.2923 0.3164 3.4303 0.3802 0.0370 0.9888
EPHC × 2018 −3.0362 0.3851 −8.9828 0.0849 −1.0123 0.7977
EPHC × 2019 −6.3568 0.1240 −14.5525 0.0092 −2.7674 0.5741
EPHC × 2020 −7.4210 0.1151 −16.2368 0.0058 −4.9265 0.0541

SOURCE Authors’ analysis of Elevance Health claims data. NOTES p values were calculated using cluster robust standard errors.
Reference for all variables is non-EPHC, base year 2016. Variables with multiplication symbols are interaction terms.

1800 H e a lt h A f fai r s D e c em b e r 2 0 2 2 41 : 1 2
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 Exhibit 4

Annual adjusted differences in quality performance between Elevance Health’s Enhanced Personal Health Care (EPHC) and non-EPHC providers, 2017–20
2017 2018 2019 2020
Quality measures Adj. diff. p value Adj. diff. p value Adj. diff. p value Adj. diff. p value
Optimal proportion of days covered
Cholesterol (statins) 0.4% 0.2753 0.5% 0.1007 0.2% 0.4004 0.1% 0.5320
Oral diabetes 1.1 0.0333 1.0 0.0058 0.8 0.0695 0.3 0.0409
Hypertension (ACE inhibitors or ARBs) 1.0 0.0220 1.0 0.0043 0.6 0.0377 0.5 0.0105
Appropriate testing for children
With pharyngitis 2.2 0.0900 1.9 0.0789 1.4 0.1728 0.9 0.3573
With upper respiratory infection 1.2 0.1852 1.9 0.0151 1.0 0.2368 0.9 0.0555
Childhood immunization status
Varicella 2.6 0.0115 2.9 0.0030 2.8 0.0191 3.6 0.0057
MMR 2.7 0.0114 2.8 0.0048 2.8 0.0229 3.3 0.0098
Pediatric well care visits
Ages 0–15 months 2.7 0.0037 3.0 0.0142 2.6 0.0559 1.9 0.1078
Ages 3–6 years 2.6 0.0023 2.9 0.0046 3.2 0.0062 2.9 0.0195
Ages 12–21 years 4.6 0.0002 5.5 <0.0001 5.3 0.0001 5.6 <0.0001
Screening
Breast cancer 5.4 <0.0001 5.4 <0.0001 5.3 <0.0001 5.6 <0.0001
Cervical cancer 2.1 0.0001 2.3 0.0004 2.6 <0.0001 2.9 <0.0001
Chlamydia screening —a −0.7 0.3096 −0.6 0.5367 −1.0 0.2759
Diabetes testing and screening
HbA1c testing 3.6 <0.0001 3.8 <0.0001 4.0 <0.0001 4.0 <0.0001
Urine protein screening 3.1 <0.0001 3.1 <0.0001 3.3 <0.0001 3.3 <0.0001
Brand formulary compliance —a 0.8 0.0023 0.7 0.1028 1.4 0.0039
Appropriate antibiotic treatment for
adults with acute bronchitis −0.2 0.7141 0.4 0.5986 0.3 0.7258 −0.2 0.7862
Use of imaging for low back pain −0.1 0.7970 −0.3 0.5889 0.0 0.9420 −0.2 0.6288

SOURCE Authors’ analysis of Elevance Health quality data. NOTES ACE is angiotensin-converting enzyme. ARB is angiotensin-II receptor blocker. MMR is measles, mumps,
and rubella. aNot available.

to redirect higher-cost outpatient services to low-
er-cost sites of care or to reduce low-value ser-
vices use, such as opportunities captured by the
Choosing Wisely organization.18 Other research
suggests that this may be the case. Using data
from the National Survey of ACOs, Margje
Haverkamp and colleagues found that about
one-third of ACO contracts took specific steps
to reduce the use of low-value medical services,
with providers in a commercial contract being
almost twice as likely as providers with public
payer contracts only to implement strategies re-
ducing the use of low-value tests and proce-
dures.19 In addition, Zhang and colleagues’ lon-
gitudinal study8 of commercial plan members in
four California counties found that outpatient
cost savings in later years came from decreased
primary care provider office visits and either
similar or increased use of lower-price special-
ists, laboratory services, and imaging facilities.
Song and colleagues, who studied the Blue Cross
Blue Shield of Massachusetts Alternative Quality
Contract, also observed savings concentrated in
the outpatient facility setting and in procedures,
imaging, and tests, explained by both reduced
prices and reduced use.17 Over time, opportuni-
ties to further reduce low-value tests and proce-
dures and optimize referral patterns may be ex-
hausted.
We observed statistically significant pharmacy
savings growth for the fully insured population
despite nonsignificant changes in prescription
use. Among the provider support services men-
tioned above, there are a variety of pharmacy-
based initiatives focused on prescription optimi-
zation; encouraging medication adherence; and
maximizing the member’s benefit to ensure eco-
nomical prescription options with respect to for-
mulary alignment, lower-cost alternatives, and
prescribing ninety-day supplies for chronic con-
ditions. Based on our quality analysis, EPHC
providers were associated with better medica-
tion adherence.
Another study has supported the association
between provider participation in value-based
contracting (the Medicare Shared Savings Pro-
gram) and improved medication adherence
among patients with chronic conditions.20 There
may be additional benefits of improved prescrip-
tion use, as better medication adherence has

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Accountable Care
been shown to be associated with lower total
health care costs for chronic conditions among
commercial plan beneficiaries.21 Although our
results may suggest that ACO participation has
optimized prescribing by containing costs and
potentially improving medication adherence, we
were unable to test this hypothesis, given the
scope of our analysis. Furthermore, Zhang and
colleagues found that commercial ACO partici-
pation was associated with negligible differential
changes in prescription drug use and spending.22
However, the Zhang study was limited to a single
health maintenance organization in four coun-
ties in California, thereby severely limiting na-
tional generalizability. Additional studies are
warranted to confirm the association among
ACO participation, prescription optimization,
and improved medication adherence.
Savings growth was higher in the fully insured
population than in the administrative services
only population. Most fully insured members
had prescription coverage, and it was in this
spending category that we saw almost half of
the savings growth. The greater savings in the
fully insured population may also be explained
by differences in plan design features. Our fully
insured population was more likely to be en-
rolled in consumer-directed health plans as well
as in plans with a tiered network benefit design.
Both elements are designed to limit costs, either
by limiting access to high-cost providers or by
requiring a high deductible that incentivizes
members to seek lower-cost care options.
Studies have supported that consumer-direct-
ed health plans help reduce spending, particu-
larly in outpatient settings and pharmacy,23,24
although they can also reduce the use of needed
services. There may be some synergy from cou-
pling stricter plan designs such as consumer-
directed health plans with value-based payment
arrangements that have a quality component, to
maximize the cost savings potential of plan de-
sign and ensure the use of preventive services.
In our analysis of quality performance, we found
higher rates of pediatric well care visits, child-
hood vaccinations, and breast cancer and cervi-
cal screening rates among the EPHC providers
Some authors hold Elevance Health
stock as part of their compensation or
an employee stock purchase plan. The
article’s abstract with highlights was
1802 H e a lt h A f fai r s D e c em b e r 2 0 2 2 41 : 1 2
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We have shown that
value-based care
arrangements can
continue to deliver
persistent savings
years into these
arrangements.
compared with other providers. Although quali-
ty measures are variable, other studies examin-
ing quality in ACO programs support either im-
provement or stable performance in quality
outcomes.8,9,25
We have demonstrated an association between
providers’ participation in ACOs in a commercial
population and savings during the study period.
Although we were unable to show a causal impact
of the program, the program’s cost and quality
performance has been sufficient that Elevance
Health has continued to build and expand the
EPHC model. We have shown that value-based
care arrangements can continue to deliver per-
sistent savings years into these arrangements.
Careful consideration of our study results and
limitations must be weighed with respect to ACO
adoption and expansion. ACO contracting to all
providers might not necessarily be broadly ben-
eficial, and measured savings might not be sus-
tainable. Payers should therefore prudently
identify opportunities for expansion or offer en-
riched support resources to providers in existing
arrangements. Furthermore, payers should
monitor savings opportunities for themselves,
providers, and their members as continued ef-
forts are made to contain rising health care
costs. ▪
presented at the AcademyHealth Annual Florida, May 2022. The authors
Research Meeting in Washington, D.C., acknowledge Emmanuel Asante for
June 6, 2022, and at the Blue Cross invaluable data support.
Blue Shield National Summit in Orlando,
NOTES
1 Centers for Medicare and Medicaid
Services, HHS. Medicare program;
Medicare Shared Savings Program:
accountable care organizations. Fi-
nal rule. Fed Regist. 2011;76(212):
67802–990.
2 Ouayogodé MH, Fraze T, Rich EC,
Colla CH. Association of organiza-
tional factors and physician practic-
es’ participation in Alternative Pay-
ment Models. JAMA Netw Open.
2020;3(4):e202019.
3 Health Care Payment Learning and
Action Network. 2020 and 2021
measurement efforts, 2021 overview
[Internet]. Baltimore (MD):
HCPLAN; [cited 2022 Oct 25].
Available from: https://hcp-lan.org/
apm-measurement-effort/2020-
2021-apm/#1638982499890-
78a9577c-d60c
4 Muhlestein D, Bleser WK, Saunders
RS, Richards R, Singletary E,
McClellan MB. Spread of ACOs and
value-based payment models in
2019: gauging the impact of Path-
ways to Success. Health Affairs Blog
[blog on the Internet]. 2019 Oct 21
[cited 2022 Sep 30]. Available from:
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10.1377/forefront.20191020
.962600/full/
5 McWilliams JM, Hatfield LA,
Chernew ME, Landon BE, Schwartz
AL. Early performance of account-
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N Engl J Med. 2016;374(24):
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6 Nyweide DJ, Lee W, Cuerdon TT,
Pham HH, Cox M, Rajkumar R, et al.
Association of Pioneer Accountable
Care Organizations vs traditional
Medicare fee for service with
spending, utilization, and patient
experience. JAMA. 2015;313(21):
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7 McWilliams JM, Hatfield LA, Landon
BE, Hamed P, Chernew ME. Medi-
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8 Zhang H, Cowling DW, Graham JM,
Taylor E. Five-year impact of a
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9 Song Z, Ji Y, Safran DG, Chernew
ME. Health care spending, utiliza-
tion, and quality 8 years into global
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10 Hong YR, Sonawane K, Larson S,
Mainous AG 3rd, Marlow NM. Im-
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11 To access the appendix, click on the
Details tab of the article online.
12 Cotiviti. DxCG Intelligence [Inter-
net]. South Jordan (UT): Cotiviti;
[cited 2022 Sep 30]. Available from:
https://www.cotiviti.com/
solutions/quality-and-performance/
dxcg-intelligence
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neighborhood-disadvantage metrics
accessible—the Neighborhood Atlas.
N Engl J Med. 2018;378(26):
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14 Post B, Ryan AM, Moloci NM, Li J,
Dupree JM, Hollingsworth JM.
Physician participation in Medicare
accountable care organizations and
spillovers in commercial spending.
Med Care. 2019;57(4):305–11.
15 Furukawa MF, Kimmey L, Jones DJ,
Machta RM, Guo J, Rich EC. Con-
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16 Lassman D, Sisko AM, Catlin A,
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BE, Day MP, Chernew ME. Changes
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18 Choosing Wisely [home page on the
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19 Haverkamp MH, Peiris D, Mainor
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20 McWilliams JM, Najafzadeh M,
Shrank WH, Polinski JM. Associa-
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21 Kymes SM, Pierce RL, Girdish C,
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23 Haviland AM, Eisenberg MD,
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25 McWilliams JM, Landon BE,
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