The federal government yesterday released early outcomes of a key program of the Affordable Care Act designed to reduce the cost of caring for Medicare patients, and the results are somewhat promising.
Thirty-two health care systems—five in Massachusetts -- were selected in 2011 to be “pioneer” accountable care organizations, testing a new model in which providers take on more financial risk as an incentive to invest in the infrastructure and staffing necessary to more intensively manage patient care and prevent unnecessary, costly hospitalizations.
Liz Kowalczyk reports in today’s Globe:
Four of the five — Partners HealthCare, Steward Health Care, the Beth Israel Deaconess Physician Organization, and the Mount Auburn Cambridge Independent Practice Association — said Tuesday that they spent less on patient care than the Medicare target for 2012, in part by reducing expensive hospital stays. The groups split the savings with Medicare.
The fifth Massachusetts organization — Atrius Health, a large doctors’ group — said it came in 2.1 percent over its budget. It is projecting a $2 million loss on the program and will have to pay Medicare a penalty. The Centers for Medicare and Medicaid Services sets an individual budget, or target, for each participating group, called a pioneer accountable care organization.
Emily Brower, Atrius’s executive director of accountable care programs, said the organization knew that the first year of the program would be difficult. Atrius had an especially aggressive budget because it had a long history of keeping down costs, in part through coordinating care with an advanced electronic medical records system.
Nationally, most of the pioneer organizations reported savings. The Centers for Medicare & Medicaid Services, in a press release, said costs for the 669,000 Medicare enrollees treated by the select accountable care organizations grew 0.3 percent in 2012, while costs for similar patients outside those organization grew 0.8 percent. Thirteen of the 23 pioneers reported savings totalling $87.6 million.
Jenny Gold of Kaiser Health News reported that nine of those health care systems have pulled out of the program, some citing a lack of savings. Most of those nine moved into a different Medicare program that allows them to share in any savings without being penalized if they spend more than Medicare projects.
Still, Chas Roades, chief research officer of the Advisory Board Company told Gold that the pioneer program was off to a good start:
“Going forward, I think we should temper our expectations about how much money we’re as actually going to save through ACOs,” says Roades. ACOs are basically a transitional “hybrid model” that preserves the Medicare fee-for-service system and only applies to a portion of the patients that hospitals see. “It’s really hard to run two disparate sets of books at the same time” and two sets of incentives, he adds.