ACOs Reduced Spending in Some Areas, Study Says

According to a new study, a precursor to the Accountable Care Organizations that policymakers are hoping will lower health costs and improve quality did reduce spending in some organizations, but not in others, Reuters Health reported.

ACOs and the earlier pilot program, known as the Medicare Physician Group Practice Demonstration, emphasize shared savings for groups of health workers and award bonus payments based on their quality of care, the study said.

That model, called pay-for-performance, is one cost-saving strategy of President Barack Obama’s health care reform law.

“A lot of people are talking about Accountable Care Organizations as a way to try to improve quality of care while reducing cost,” Craig Pollack from Johns Hopkins Medicine in Baltimore, who has studied ACOs and cost sharing but wasn’t involved in the new study, told Reuters.

“There’s increased effort (to understand) what makes a successful hospital system and what doesn’t and how to optimize systems of care,” Pollack said.

Lead author Carrie Colla told Reuters Health that the new analysis of the group practice pilot program can give organizations a better idea of what kind of cost savings to expect, and on which patients, when ACOs are rolled out.

For example, the late-2000s program led to the biggest savings on treatment of people who qualified for both Medicare and Medicaid. Known as “dual beneficiaries,” those patients have a disproportionate number of chronic health conditions and may suffer as a result of uncoordinated treatment.

Colla and her colleagues compared health care costs over time for Medicare patients seen at one of 10 systems with physician incentive groups and those treated at other facilities without the pilot program.

They found physician groups saved an average of $114 per patient each year. Savings were more than $500 per year for patients covered by both Medicare and Medicaid. That was equal to a 5 percent decrease in their cost of care — mostly due to fewer hospitalizations for heart attacks, strokes and other emergency conditions.

The physician incentive programs weren’t cost-effective across the board, however. Outcomes ranged from annual savings of $866 per patient at one organization to extra costs of $749 per patient at another.

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