News Feature | February 4, 2014

ACO Experiment Nets Uneven Results For Providers

Source: Health IT Outcomes
Christine Kern

By Christine Kern, contributing writer

CMS data shows over 50 percent of organizations joining ACO initiatives did not reduce health spending targets in initial year

Just over half of the 114 organizations that joined a Medicare accountable care effort in 2012 failed to reduce health spending below targets during their first 12 months trying to do so, newly released CMS data shows. Preliminary results highlight the uneven progress made to date by hospitals and doctors coordinating treatment and reducing unnecessary care to reduce healthcare costs.

Late last year, Health and Human Services Secretary Kathleen Sibelius stated in a CMS press release, “Accountable Care Organizations are delivering higher-quality care to Medicare beneficiaries and are using Medicare dollars more efficiently. This is a great example of the Affordable Care Act rewarding hospitals and doctors that work together to help our beneficiaries get the best possible care.”

“This program puts the control in the hands of physicians and allows them to take the lead in an innovative way to deliver the right care to the right patient at the right time,” said the executive director of the Palm Beach ACO and South Florida ACO, Kelly Conroy in the same CMS release. “We are honored to be a Medicare Shared Savings Program Accountable Care Organization, and after 18 months in the program, can proudly say that we have seen measurable success. We are so impressed with our participating physicians’ enthusiasm towards the cultural shift, and it demonstrates that physicians are primed for the future of medicine.”

Yet the initial findings are showing a much less enthusiastic return on investment. Modern Healthcare reports the inconsistent preliminary results are similar to the mixed performances in Medicare's smaller test of accountable care. The CMS Innovation Center's Pioneer ACO model, also launched in 2012, saw nine of 32 organizations exit the program after its first year. Nine of the remaining 23 organizations saved money, according to an independent audit.

Medicare officials are not discouraged by the numbers. Jonathan Blum, principal deputy administrator for the CMS, said the performance to date has increased officials' confidence in accountable care's ability to lower Medicare spending and improve the quality of care. Leaders anticipated that the first year would require investment and reorganization among ACOs to save money in later years, he said. “We have built the ACO program for long-term savings.”

Preliminary data reveals that Medicare will keep $128 million from the first year of the shared-savings program, while successful ACOs will share another $126 million. Final results will be published by the CMS later this year.

Industry experts question the findings, however. Dr. Kavita Patel, managing director of the Brookings Institution's Engleberg Center for Healthcare Reform, said “It's good news that there's savings. Period. “However, we must ask how and why ACOs did not save money. “We can learn more from what's happening in the remainder of the organizations.”