Measuring Value in Healthcare: Lessons from Accountable Care Organizations

Accountable care organizations (ACOs) were created to promote healthcare value by improving health outcomes while curbing healthcare expenditures. Although a decade has passed, the value of care delivered by ACOs is yet to be fully understood. We proposed a novel measure of healthcare value using data envelopment analysis and examined its association with ACO organizational characteristics and social determinants of health (SDOH). We observed that the value of care delivered by ACOs stagnated in recent years, which may be partially attributed to challenges in care continuity and coordination across providers. ACOs that were solely led by physicians and included more participating entities exhibited lower value, highlighting the role of coordination across ACO networks. Furthermore, SDOH factors, such as economic well-being, healthy food consumption, and access to health resources, were significant predictors of ACO value. Our findings suggest a “skinny in scale, broad in scope” approach for ACOs to improve the value of care. Healthcare policy should also incentivize ACOs to work with local communities and enhance care coordination of vulnerable patient populations across siloed and disparate care delivery systems.