Surgeons and Surgeon Care in Early Medicare Accountable Care Organizations

A recent study funded by a grant from the American College of Surgeons and published in Health Affairs looks at the role surgeons and other specialists play within Accountable Care Organizations (ACOs).The design of an ACO is such that it provides incentives for cost savings without limiting patient choice or quality of care. ACOs approved by the Centers for Medicare and Medicaid Services (CMS) are important because the private sector is developing ACOs and will look to Medicare’s experience to guide the direction of their organizations. Utilizing case studies and a survey, this study follows the early experience of fifty-nine Medicare-approved ACOs throughout the country in providing surgical care.

Initial findings indicate a strong focus on primary care, with little attention given to surgical care and the role that surgery plays for ACOs’ patients. As ACOs grow and evolve, this research concludes that more attention will be given to surgical quality, the appropriateness of surgery, and surgical outcomes. This study also concludes that focusing on the integration of care, especially in the management of patients with complex conditions and multiple medical problems who often require surgical care, is vital to achieving the goals of better health care, better overall patient health, and lower costs.

However, the average American undergoes nine surgeries in their lifetime, with surgery representing approximately 50 percent of hospital expenditures and an estimated 30 percent of total health care costs. Even with a strong focus on chronic disease management and transitional care, overlooking the cost of surgical care can negate savings made by pursuing only primary care goals and outcomes because it accounts for such a large portion of an individual’s lifetime expenditures on health care.

What follows is a brief outline of how the study was conducted and several points of interest that were noted in various categories pertaining to ACO structure.

Case Studies/Survey

Four ACOs representative of the initial Medicare rollout in terms of ACO type (Shared Savings Program or Pioneer), organizational leadership (hospital- or physician-led), and geographic diversity (South, West, Midwest, or Northeast region) were selected as samples for this study. An interview guide was developed that asked questions regarding organizational structure and governance, strategic objectives, the effect of ACOs on specialty relationships, care coordination and integration, and performance incentives. Subjects who would provide the greatest insight into the ACOs’ strategic goals and performance incentives (especially with respect to the roles of surgeons) were selected for interviews.

For increased representativeness, a survey of all fifty-nine initial Medicare ACOs was made available and administered by mail or e-mail. This fourteen-item questionnaire asked about strategic priorities, the number of participating surgeons within an ACO, and incentive arrangements.

 Strategic Objectives within the ACOs

Both case study and survey results show coordinated medical care as a core strategic objective. Surgery was not part of any of the strategic plans of any of the case study sites, and not a single interviewee could say how much of the ACOs’ total expenditures were attributable to surgery. Eighty-six percent of responders indicated that the goal of reducing unnecessary surgery was a “medium,” “low,” or “very low” priority whereas 97 percent considered reducing avoidable hospital readmissions a “high” or “very high” priority. Managing high cost/high risk patients and avoiding wasted resources because of a lack of care coordination received similarly high scores from respondents.

Surgical Care Relationships

Interviewees across the board indicated more interest in trying soft approaches to surgical referral patterns instead of making efforts directed toward organizational change. For example, several of them stated that they expected primary care physicians’ preferences to continue to drive the surgical referrals instead of solely leveraging the promise of future shared savings, the general thought being that shared savings alone would not be enough to motivate surgeons to align their practice patterns with ACO goals. The general belief seemed to be that access to referrals would drive surgeons to comply with goals.

Most case study participants indicated that future attention would be devoted to evaluating surgical care using a variety of metrics to help align ACO goals and surgeon relationships.

Performance Incentives/Shared Savings

The purpose of an insurer’s shared savings is that it incentivizes the achievement of cost and quality objectives. During this research, all of the case study sites were still laying out formal policies for distribution from Medicare. Seventeen of the ACOs that responded to the survey planned to distribute savings to their primary care physicians, and eight of those planned to share savings with surgeons and other specialists as well.

Many interviewees stated that nonfinancial incentives would be more effective than small financial ones in encouraging surgeons to improve productivity and quality.

Future Directions

It has been argued that any single intervention (such as reducing hospital admissions and ER visits) will have only a minimal effect of on total spending. This research indicates that the success of healthcare reform may depend on the ability to increase integration of care across the board. Some specific ideas, such as (1) surgeons working directly with primary care physicians to ensure appropriate (and not overly complex) preoperative workups and (2) primary care physicians working with surgeons to ensure that chronic conditions associated with poor preoperative outcomes are managed well before surgery, could be ways to further the goals of healthcare reform.

Additionally, electronic health records could be used to manage consultations and reduce readmissions after surgery by dealing with postoperative issues remotely.

Longer-term solutions include (1) the development or adoption of guidelines for common clinical conditions that typically bring patients to primary care offices but are ultimately treated by surgeons and (2) working with surgeons to incorporate appropriateness criteria into clinical workflow and payment models.


This study determines that focus on hospital admissions and readmission as well as coordination of care for patients with complex conditions are the main emphasis of these particular Medicare ACOs. Some ACOs have the ability to affect surgical practice patterns through primary care referrals, but it seems that local market conditions may have a greater impact on ACOs’ power to alter surgeons’ behavior.

The value of this study is not just for surgeons, but for ACO administrators, policy makers, and others within the ACO system because they are the ones with the potential to affect practice patterns for surgical patients, the care provided to ACO patients in general, and the overall success of ACOs as a whole.


Dupree, J. M., Patel, K., Singer, S. J., West, M., Wang, R., Zinner, M. J., & Weissman, J. S. (2014). Attention to surgeons and surgical care is largely missing from early Medicare Accountable Care Organizations. Health Affairs, 33(6): 972-979. doi: 10.1377/hlthaff.2013.1300