By William B. Weeks, Daniel J. Gottlieb, David E. Nyweide, Jason M. Sutherland, Julie Bynum, Lawrence P. Casalino, Robin R. Gillies, Stephen M. Shortell, and Elliott S. Fisher Higher Health Care Quality And Bigger Savings Found At Large Multispecialty Medical Groups ABSTRACT The belief that integrated delivery systems offer better care at lower cost has contributed to growing interest in accountable care organizations. These provider-led delivery systems would accept responsibility for their primary care populations and would have financial incentives for improving care and reducing costs. We investigated this belief by comparing the costs and quality of care provided to Medicare beneficiaries in twenty-two health care markets by physicians who did and did not work within large multispecialty group practices affiliated with the Council of Accountable Physician Practices. In most markets, and after adjustment for patient factors, group physicians affiliated with the council provided higher-quality care at a 3.6 percent lower annual cost ($272 per patient). A growing body of evidence points to substantial opportunities to im- prove the performance of the U.S. health care system. The Institute of Medicine (IOM) 1 and others 2,3 have documented serious deficiencies in health care quality. The quality 4 and costs 5–7 of health care vary dramatically across regions and health sys- tems within the United States. Higher-spending systems, on average, provide lower quality of care 8 and achieve equal or worse outcomes. 9–12 These studies point to large potential opportu- nities to improve both the quality and the cost of care—that is, to increase the efficiency of the U.S. health care delivery system. 13 Many have argued that large multispecialty group practices provide higher-quality care at lower costs than small group practices. 14–17 Some policy analysts suggest that U.S. policy should foster the growth of accountable care organiza- tions—provider-led, local health care delivery systems that would accept responsibility for the continuum of care for their primary care patients and have financial incentives to improve quality and reduce the costs of care. Large multi- specialty group practices would be well posi- tioned to serve as accountable care organiza- tions. 18 Evidence, however, has been limited. 19 To provide insight into the potential advan- tages of such integrated group practices, we identified Medicare beneficiaries who received care from physicians in the large multispecialty group practices that are members of the Council of Accountable Physician Practices (CAPP). The council is an affiliate of the American Medical Group Association and constitutes a consortium of twenty-seven large U.S. multispecialty group practices. Members recognize accountability for cost and quality as a model for transforming the U.S. health care system. 20 We compared the care given these Medicare patients on selected mea- sures of ambulatory care quality and cost with that of Medicare beneficiaries receiving care from physicians in the same markets who were not affiliated with a CAPP group. Study Data And Methods The self-selected medical groups that participate in CAPP are all multispecialty physician groups that range in size from approximately 250 to 13,000 physicians. Of the current twenty-seven doi: 10.1377/hlthaff.2009.0388 HEALTH AFFAIRS 29, NO. 5 (2010): 991–997 ©2010 Project HOPE— The People-to-People Health Foundation, Inc. William B. Weeks (William.B .Weeks@dartmouth.edu) is an associate professor at the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, New Hampshire. Daniel J. Gottlieb is a research analyst at the Dartmouth Institute. David E. Nyweide is a doctoral candidate at the Dartmouth Institute. Jason M. Sutherland is an associate professor at the Dartmouth Institute. Julie Bynum is an associate professor at the Dartmouth Institute. Lawrence P. Casalino is an assistant professor at Weill Cornell Medical College in New York City. Robin R. Gillies is director of research projects at the School of Public Health, University of California, Berkeley. Stephen M. Shortell is dean and professor at the Haas School of Business, University of California, Berkeley. Elliott S. Fisher is director of the Center for Healthcare Research and Reform, Dartmouth Institute. MAY 2010 29:5 HEALTH AFFAIRS 991 New Models & Innovations