In the first 2 years of the Pioneer Accountable Care Organization (ACO) Model, beneficiaries aligned with these ACOs, as compared with general Medicare fee-for-service beneficiaries, showed smaller increases in total Medicare expenditures, with an estimated savings of approximately $385 million, according to a study published by JAMA. The study is being released to coincide with an announcement by the Centers for Medicare & Medicaid Services (CMS) about the performance of the Pioneer ACO model.
In 2012, the CMS launched the Pioneer ACO Model and the Medicare Shared Savings Program as alternative payment approaches to engage physicians and health care organizations willing to assume collective responsibility for the cost and quality outcomes of a specified population of fee-for-service (FFS) Medicare beneficiaries. As part of the incentive to participate, Pioneer ACOs with an annual spending level lower than a projected spending level can receive a portion of the difference between their spending and the projection as shared savings with CMS, conditional on their performance on a set of 33 quality measures. The Pioneer ACO Model is one of several attempts to test the viability of the ACO concept as means to improve quality of care and reduce spending in the U.S. health care system, according to background information in the article.
Rahul Rajkumar, M.D., J.D., of the Centers for Medicare & Medicaid Services, Baltimore, and colleagues determined whether FFS beneficiaries aligned with 32 Pioneer ACOs (n = 675,712 in 2012; n = 806,258 in 2013) had smaller increases in spending and utilization than other FFS beneficiaries (a comparison group of alignment-eligible beneficiaries in the same markets [n = 13,203,694 in 2012; n = 12,134,154 in 2013]) while retaining similar levels of care satisfaction in the first 2 years of the Pioneer ACO Model.
The researchers found that total spending for beneficiaries aligned with Pioneer ACOs in 2012 or 2013 increased from baseline (2010-2011) to a lesser degree relative to comparison populations. Differential changes in spending were approximately -$35.62 per-beneficiary-per-month (PBPM) in 2012 and -$11.18 PBPM in 2013, which amounted to aggregate reductions in increases of approximately -$280 million in 2012 and -$105 million in 2013.
A large portion of the smaller increase in spending was from decreases in inpatient utilization among ACO-aligned beneficiaries, although greater decreases in primary care evaluation and management office visits, and smaller increases in the use of tests, procedures, and imaging services also were related to the observed differences in changes in spending. There was no difference in all-cause readmissions within 30 days of discharge, but follow-up visits after hospital discharge increased more for ACO-aligned beneficiaries.
Compared with other Medicare beneficiaries, ACO-aligned beneficiaries reported higher average scores for timely care and for clinician communication.
“These results are encouraging, given how historically challenging it has been for physicians to achieve spending reductions in Medicare demonstration projects,” the authors write. “Despite decreases in spending growth, results from this study and previously reported data on Pioneer ACOs’ performance on clinical quality measures suggest it is possible to reduce expenditure growth while maintaining or improving quality in a FFS payment environment.”
Editorial: Pioneer Accountable Care Organizations – Traversing Rough Country
Lawrence P. Casalino, M.D., Ph.D., of Weill Cornell Medical College, Healthcare Policy and Research, New York, comments on the findings of this study in an accompanying editorial.
“Nyweide et al estimated that Pioneer ACOs achieved savings for CMS of $280 million in their first year. This represents a savings of approximately 4 percent. This amount may seem small, but if this rate of savings could be sustained, and achieved throughout a large part of the U.S. health care system, it would be more than enough to ‘bend the cost curve’ so that health care expenditures do not continue to increase as a percentage of the gross domestic product and the federal budget.”
“Can this rate of savings be sustained? The Pioneer ACOs produced savings in year 2 that were one-third of year 1 savings. It is possible that during the first year these ACOs were able to ‘grasp the low hanging fruit’ – to address relatively easy ways to control costs – and that the savings they generate will be much smaller, at best, in subsequent years. Alternatively, it may be that it will take time for ACOs to develop better processes to improve the care of their patients and that they will be able to continue to lower costs for years to come.”
“The number of ACOlike contracts between private insurers is increasing rapidly. The next 5 years will be critical in determining if ACOs can indeed maintain or improve quality of care at a time when new therapies are emerging and simultaneously control the rise of health care costs.”
Editorial: Accountable Care Organizations and Evidence-Based Payment Reform
“This early evidence moves the effects of ACOs from speculation to reality and highlights the importance of further evaluation as alternative payment models are refined,” writes Mark McClellan, M.D., Ph.D., of The Brookings Institution, Washington, D.C., in an accompanying editorial. “Payment reform moving away from FFS is now part of the policy landscape, but the exact form it will take is less clear. Evaluations like this derived from actual payment reforms can provide more clarity.”
“Incorporating evaluations like this alongside the implementation of further ACO payment reforms would help ensure that many health care organizations do not end up in alternative payment models that are not improving care and also would provide more evidence that clinicians could use to succeed in ACOs. Payment reform has a long way to go, but it is possible for further steps to be guided by the development of better evidence. Reforming care to achieve better outcomes and lower costs is not easy, even with financing that is better aligned. Nonetheless, an increasing number of diverse health care organizations are demonstrating that it is possible.”
