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Accountable Care Organizations in California: Market Forces at Work?

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  • Whaley, Christopher
  • Frech, HE
  • Scheffler, Richard M

Abstract

Accountable care organizations (ACOs), one of the most recent and promising health care delivery innovations, encourage care coordination among providers. While ACOs hold promise for decreasing costs by reducing unnecessary procedures, improving resource use as a result of economies of scale and scope, ACOs also raise concerns about provider market power. This study examines the market-level competition factors that are associated with ACO participation and the number of ACOs. Using data from California, we find that higher levels of preexisting managed care leads to higher ACO entry and enrollment growth, while hospital concentration leads to fewer ACOs and lower enrollment. We find interesting results for physician market power - markets with concentrated physician markets have a smaller share of individuals in commercial ACOs but a larger number of commercial ACO organizations. This finding implies smaller ACOs in these markets.

Suggested Citation

  • Whaley, Christopher & Frech, HE & Scheffler, Richard M, 2015. "Accountable Care Organizations in California: Market Forces at Work?," University of California at Santa Barbara, Recent Works in Economics qt63n5h1xm, Department of Economics, UC Santa Barbara.
    • Handle: RePEc:cdl:ucsbrw:qt63n5h1xm
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    1. Tuan Hock Ng & Lee Lee Chong & Hishamuddin Ismail, 2013. "Firm size and risk taking in Malaysia's insurance industry," Journal of Risk Finance, Emerald Group Publishing, vol. 14(4), pages 378-391, August.
    2. repec:eme:jrfpps:v:14:y:2013:i:2:p:378-391 is not listed on IDEAS
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    Cited by:

    1. Mariétou H. Ouayogodé & Taressa Fraze & Eugene C. Rich & Carrie H. Colla, "undated". "Association of Organizational Factors and Physician Practices’ Participation in Alternative Payment Models," Mathematica Policy Research Reports 6a3b0d6957274771bfb061e62, Mathematica Policy Research.

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