INSIGHTS

Pioneer ACO Spending and Use

October 20, 2015
Issue: 

Background, Methods

In 2012, the Centers for Medicare & Medicaid Services (CMS) launched the Pioneer Accountable Care Organization (ACO) Model and the Medicare Shared Savings Program (MSSP) as alternative payment approaches to engage physicians and healthcare organizations willing to assume collective responsibility for the cost and quality outcomes of a specified population of fee-for-service (FFS) Medicare beneficiaries. MSSP is a permanent program. The Pioneer ACO Model is one of several tests of ACOs’ ability to improve quality of care and reduce U.S. healthcare spending.

The study examined whether FFS beneficiaries cared for by physicians participating in Pioneer ACOs had smaller increases in spending and utilization than other FFS beneficiaries while retaining similar levels of care satisfaction in the first two years of the Pioneer ACO Model.

Results

In 2012 and 2013, increases in total spending were less for beneficiaries aligned with Pioneer ACOs than for comparison populations (see Chart 1). Compared with other Medicare beneficiaries, ACO-aligned beneficiaries reported higher mean scores for timely care and for clinician communication (see Chart 2).

Analysis

There are a few remarkable findings from this study. The lion’s share of the per-beneficiary-per-month growth reduction came through reductions in hospital utilization (50%), with a smaller share coming from reductions in utilization of physician services (25%). It’s interesting to note the smaller savings (reduction in growth) in year two compared with year one. Is it possible that the year-one savings were the “low-hanging fruit” and therefore easier to achieve? With the year-two savings less than half the year-one savings, it would be interesting to carry this analysis out in subsequent years to determine the opportunity for sustainable savings over time. Still, the authors estimate that the Pioneer ACOs generated $280 million in expenditure savings, and if that is sustainable, the ACO model may, in fact, be able to bend the cost curve.

Also of note, Pioneer ACO beneficiaries rated their experience of care—including timeliness and ease of obtaining care, access to specialists and clinician communication—at least as high as for beneficiaries in the FFS and Medicare Advantage programs. This seems to indicate that providers, given the right incentives, can simultaneously achieve at least two of the IHI’s Triple Aim goals.

Matt Zavadsky, MS-HSA, EMT, is the public affairs director at MedStar Mobile Healthcare.

 

Chart 1: Approximate Differential in Increases in Spending, Pioneer ACO Beneficiaries vs. FFS Beneficiaries

Per-beneficiary-per-month (PBPM):

2012: -$35.62 (95% CI, -$40.12 to -$31.12)

2013: -$11.18 (95% CI, -$15.84 to -$6.51)

Aggregate:

2012: -$280 (95% CI, -$315 to -$244) million

2013: -$105 (95% CI, -$148 to -$61) million

Inpatient spending PBPM showed the largest differential change of any spending category:

2012: -$14.40 (95% CI, -$17.31 to -$11.49)

2013: -$6.46 (95% CI, -$9.26 to -$3.66).

 

Chart 2: 2012 Patient Consumer Assessment of Healthcare Providers & Systems (CAHPS) Survey Scores

                                            ACO          FFS         Medicare Advantage

Timely Care                          77.2           71.2        72.7

Clinician Communication         91.9          88.3        88.7

(Range: 0–100)