Trust, Money, and Power: Life Cycle Dynamics in Alliances Between Management Partners and Accountable Care Organizations

Original Scholarship

Policy Points:

  • Accountable care organizations (ACOs) form alliances with management partners to access financial, technical, and managerial support.
  • Alliances between ACOs and management partners are subject to destabilizing tension around decision-making authority, distribution of shared savings, and conflicting goals and values.
  • Management partners may serve either as trainers, ultimately breaking off from the ACO, or as central drivers of the ACO.
  • Management partner participation in ACOs is currently unregulated, and management partners may receive a significant portion (in some cases, majority) of shared savings.

Context: Accountable care organizations (ACOs) are a prominent payment and delivery model. Though ACOs are often described as groups of health care providers, nearly 4 in 10 ACOs partner with a management company for services such as financial investment, contracting, data analytics, and care management, according to recent research. However, we know little about how and why these partnerships form. This article aims to understand the reasons providers seek partners, the nature of these relationships, and factors critical to the success or failure of these alliances.

Methods: We used qualitative data collected longitudinally from 2012 to 2017 at 2 ACOs to understand relationships between management partners and ACO providers. The data include 115 semistructured interviews and observational data from 7 site visits. Two coders applied 48 codes to the data. We reviewed coded data for emergent themes in the context of alliance life cycle theory.

Findings: Qualitative data revealed that management partners brought specific skills and services and also gave providers confidence in pursuing an ACO. Over time, tension between providers and management partners arose around decision-making authority, distribution of shared savings, and conflicting goals and values. We observed 2 outcomes of partnerships: cemented partnerships and dissolution. Key factors distinguishing alliance outcome in these 2 cases include degree of trust between organizations in the alliance; approach to conflict resolution; distribution of power in the alliance; skills and confidence acquired by the ACO over the life of the alliance; continuity of management partner delivery on promised resources; and proportion of savings going to the management partner.

Conclusions: The diverging paths for ACOs with management partners suggest 2 different roles thatmanagement partners may play in ACO development. In some cases, management partners may serve as trainers, with the partnership dissolving once the ACO gains skills and confidence to work alone. In other cases, the management partner is a central driver of the ACO and unlikely to break off.

Keywords: strategic alliances, accountable care organizations, management partners, life cycle theory, organizational learning.

Read on Wiley Online Library

Volume 96, Issue 4 (pages 755-781)
DOI: 10.1111/1468-0009.12356
Published in 2018