Katherine Stevens Faculty Mentor: Susan Averett Economics Department Lafayette College 730 High St, Easton, PA 18042

This analysis examines the effect of financial incentives for healthcare providers on health outcomes in the United States. Previously, healthcare providers in government programs were generally paid a set value for individual diagnoses. In 2011, the Centers for Medicare and Medicaid Services (CMS) introduced a new payment method for networks of health providers that treat Medicare beneficiaries, based on the quality of their services, not the quantity. This payment model incentivizes these networks, called Accountable Care Organizations (ACOs), to provide better quality services at lower costs by creating benchmark spending goals based on previous spending and quality scores. ACOs that meet the benchmarks are permitted to keep some of their savings as a reward. CMS has introduced different programs that allow ACOs to keep greater savings, but also incur greater losses when benchmarks are not met. Recently many ACOs have discontinued their contracts in some programs because despite cutting costs and improving quality, they have not received financial compensation due to the way the benchmarks are constructed. As of 2016, there are 433 ACOs, serving 7.7 million Medicare beneficiaries and also patients who are not in the Medicare program. To determine if the ACO model results in higher quality healthcare, I use regression analysis to compare county level health outcomes for counties with an ACO to those without an ACO, taking into account the type of ACO program in place. My data on ACOs come from CMS and the data on county-level health indicators from the Centers for Disease Control. I control for other county characteristics to isolate the effects of ACOs on health outcomes. This study can help clarify the efficacy of incentivized care for health providers.

Additional Abstract Information

Presenter: Katherine Stevens

Institution: Lafayette College

Type: Oral

Subject: Public Health

Status: Approved

Time and Location

Session: Oral 7
Date/Time: Fri 1:40pm-2:00pm
Location: Fogelman Classroom Building 262
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