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Hospital Report

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The premier resource for hospital professionals from Relias Media, the trusted source for healthcare information and continuing education.

Pioneer ACOs, one year later

January 12th, 2015

The results are in for the first year of the CMS Pioneer Accountable Care Organization – and it’s a mixed bag of bright spots, not-so-bright spots, lessons learned.

Thirty-two organizations were selected to become Pioneer ACOs and cut costs to physicians and Medicare through quality improvement. Physicians and are reimbursed on the basis of quality, rather than volume. According to new CMS data:

  • All 32 ACOs reported quality improvement and performed better than fee-for-service Medicare in 15 measures.
  • Costs for the 669,000 beneficiaries in the Pioneer ACOs grew 0.3% in 2012, compared to 0.8% for conventional Medicare beneficiaries.
  • The 32 sites generated gross savings of $87.6 million and saved almost $33 million for the Medicare Trust Funds. Thirteen were able to share savings with CMS.
  • Readmissions, cholesterol levels, and blood pressure were also lower compared to conventional Medicare.
And now for the minuses: Two ACOs reported losses totaling $4 million. Nine of the Pioneer locations are dropping out of the program, though seven are planning to apply to the Medicare Shared Savings Program – sort of an ACO lite, with less risk of losses (this article compares the switch as going to the minor leagues after a stint in the majors). Presbyterian Healthcare Services in New Mexico plans to drop out entirely – the program did not save them money as there wasn’t much waste to cut, a spokesman explained.

So while the ACO program may not be a rousing success at this point, it does show promise. Cost savings are being shown, and the majority of the participating organizations are going to stick with it. There are two more years to the Pioneer program, and it will be interesting to see what sorts of tweaks and improvements are made, and whether the results will encourage other health systems to become ACOs (or at least take away some of the doubt).