Impact of a commercial accountable care organization on prescription drugs

Objective: To determine the long-run impact of a commercial accountable care organization (ACO) on prescription drug spending, utilization, and related quality of care. Data Sources/Study Setting: California Public Employees' Retirement System (CalPERS) health maintenance organization (HMO) member enrollment data and pharmacy benefit claims, including both retail and mail-order generic and brand-name prescription drugs. Study Design: We applied a longitudinal retrospective cohort study design and propensity-weighted difference-in-differences regression models. We examined the relative changes in outcome measures between two ACO cohorts and one non-ACO cohort before and after the ACO implementation in 2010. The ACO directed provider prescribing patterns toward generic substitution for brand-name prescription drugs to maximize shared savings in pharmacy spending. Data Collection/Extraction Methods: The study sample included members continuously enrolled in a CalPERS commercial HMO from 2008 through 2014 in the Sacramento area. Principal Findings: The cohort differences in baseline characteristics of 40 483 study participants were insignificant after propensity-weighting adjustment. The ACO enrollees had no significant differential changes in either all or most of the five years of the ACO operation for the following measures: (1) average total spending and (2) average total scripts filled and days supplied on either generic or brand-name prescription drugs, or the two combined; (3) average generic shares of total prescription drug spending, scripts filled or days supplied; (4) annual rates of 10 outpatient process quality of care metrics for medication prescribing or adherence. Conclusions: Participation in the commercial ACO was associated with negligible differential changes in prescription drug spending, utilization, and related quality of care measures. Capped financial risk-sharing and increased generics substitution for brand names are not enough to produce tangible performance improvement in ACOs. Measures to increase provider financial risk-sharing shares and lower brand-name drug prices are needed.