Modest Savings Achieved by Some, Not All, Early ACOs in Medicare Program
October 13th, 2016
BOSTON -- Did being an early adopter pay off with the Medicare Shared Savings Program (MSSP) when it launched in 2012?
A study published recently in the New England Journal of Medicine notes that accountable care organizations joining MSSP four years ago achieved modest savings while maintaining or improving performance on measures of quality of patient care in 2013, the first full year of the program.
The program, which now includes 430 participants, began in mid-2012 and early 2013 with the first two cohorts of provider groups. In the first detailed examination of the healthcare payment reform program, researchers from Harvard Medical School found that those practices lowered spending by 1.4% in 2013 compared to a control group of non-ACO providers in the same areas.
That represented a $238 million reduction in spending, study authors emphasized, adding that the savings provide more evidence of early promising results from Medicare ACO initiatives, of which the MSSP is the largest.
The results were not as straightforward as they might have seen at first glance, however. Unlike many other ACO programs such as the Pioneer model, MSSP participants are not required to reimburse Medicare if spending exceeds the benchmark.
The report notes that, while the ACOs joining in 2012 cut spending by $238 million, those signing up in 2013 achieved no savings in their first full year in the program. Furthermore, because Medicare paid out $244 million in shared-savings bonuses to ACOs in the 2012 group, it realized no net savings because of the lower spending.
Study authors question whether the early success of the first participants will be replicated by the ACOs that joined the MSSP in later years.
"These results suggest that ACOs with no downside risk can achieve savings, but that savings to Medicare and society may be slow to develop," said lead author J. Michael McWilliams, MD, PhD. "But the incentives for ACOs to lower spending are currently very weak, so savings may accelerate if the incentives are strengthened."
In a surprising finding, the researchers also found that independent primary care groups participating in the MSSP achieved significantly greater savings than hospital-integrated groups. "Some have presumed that forming a large hospital system that owns a lot of outpatient practices is a prerequisite for ACO success," McWilliams pointed out. "We do not find this to be the case."
"These early results are encouraging overall," McWilliams said. "But building on the initial success of ACO models in Medicare will require stronger incentives and rigorous evaluations to identify groups of systematically successful ACOs whose organizational models and strategies can be disseminated."