News Feature | September 18, 2013

ACO Savings Spreading Through Healthcare System

Source: Health IT Outcomes
Katie Wike

By Katie Wike, contributing writer

HTO Calculator And Money

Money saved in multipayer systems like Accountable Care Organizations is creating “spillover savings” in the rest of the healthcare system

A study published by the Journal of the American Medical Association set out to determine “whether the Blue Cross Blue Shield (BCBS) of Massachusetts’ Alternative Quality Contract (AQC), an early commercial ACO initiative associated with reduced spending and improved quality for BCBS enrollees, was also associated with changes in spending and quality for Medicare beneficiaries, who were not covered by the AQC.”

The authors of the study concluded, “The AQC was associated with lower spending for Medicare beneficiaries but not with consistently improved quality. Savings among Medicare beneficiaries and previously demonstrated savings among BCBS enrollees varied similarly across settings, services, and time, suggesting that organizational responses were associated with broad changes in patient care.”

The Washington Post simplifies the author’s conclusion, writing, “Accountable care organizations (ACOs) may actually be the unicorns we’ve been waiting for, spreading their cost-saving magic throughout the health system.”

The Post explains, noting, “Within two years, providers in the private BCBS Alternative Quality Contract, an ACO-like effort also achieved a significant savings (more than 3 percent) for the Medicare patients they saw, relative to a control group of Medicare patients seen by providers at other Massachusetts hospitals. The average savings in outpatient care was $73 per patient, and ‘included significant differential changes in spending on office visits, emergency department visits, minor procedures, imaging, and laboratory tests.’”

“The spillover savings in Medicare that we found suggest that at least some of the interventions providers adopted in response to the AQC changed the way care was delivered for all patients,” said assistant professor J. Michael McWilliams M.D Ph.D., of Harvard Medical School, Boston.

A press release sent by the research team noted, “In general, cost-reducing spillover effects of ACO contracts with one insurer on care for other insurers' enrollees should signal a willingness among provider organizations generating the spillovers to enter similar contracts with additional insurers; they could be rewarded for the savings and quality improvements achieved for the other insurers' enrollees.” The release concludes, “Our study suggests that organizations in Massachusetts willing to assume greater financial risk were capable of achieving modest reductions in spending for Medicare beneficiaries without compromising quality of care.”