Physician Compensation, ACO vs. Non-ACO

Accountable Care Organizationsnew study published in the Annals of Family Medicine suggests that family physicians in accountable care organizations (ACOs) may not be paid that much differently than their counterparts in non-ACO practices.

Using data from a national survey of physician practices, the study compared primary care physicians’ compensation between practices in ACOs and practices that varied in their financial risk for primary care costs using 3 groups:

  • Practices not participating in a Medicare ACO and with no substantial risk for primary care costs
  • Practices not participating in an ACO but with substantial risk for primary care costs
  • Practices participating in an ACO regardless of their risk for primary care costs.

The study measured physicians’ compensation as the percentage of compensation based on salary, productivity, clinical quality or patient experience, and other factors.

Key highlights include:

  • Physicians in ACOs and non-ACO practices with no substantial risk for costs were compensated similarly; on average, they received nearly one-half of their compensation from salary, slightly less from productivity, and about 5 percent from quality and other factors.
  • Physicians not in ACOs but with substantial risk for primary care costs received two-thirds of their compensation from salary, nearly one-third from productivity, and slightly more than 1 percent from quality and other factors.
  • Participation in ACOs was associated with significantly higher physician compensation for quality; however, ACO participation was not significantly associated with compensation from salary, whereas financial risk was associated with much greater compensation from salary.

Although practices in ACOs provide higher compensation for quality, compared with practices at large, they provide a similar mix of compensation based on productivity and salary. Incentives for ACOs may not be sufficiently strong to encourage practices to change physician compensation policies for better patient experience, improved population health, and lower per capita costs.

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