Accountable Care Organizations

Savings from Accountable Care Organizations continue adding up

As Medicare continues its push toward directing 50 percent of reimbursements through alternative payment models (APMs) by 2018, recently released data shows the mounting savings generated by Accountable Care Organizations (ACOs). Last year, ACOs achieved savings of $466 million, according to a report issued by CMS.

Since 2012, ACOs have saved Medicare more than $1.29 billion, and the data shows that as they gain experience, ACOs are getting better at generating savings – all without compromising quality. Between Pioneer ACOs, which take on greater financial risk for the chance of a greater reward, and the Medicare Shared Savings Program, in which providers have the chance to earn bonuses if their results are strong enough, quality measures have continued improving over the years.

The new results show the 12 participants in the Pioneer ACO improved their quality scores over the past 3 years by more than 21 percentage points. The larger Medicare Shared Savings Program, with 392 participants, saw participants improve on 84 percent of the quality measures that were reported in both 2014 and 2015. Quality scores for “key preventive care measures,” including screening for fall risk, blood pressure screening and pneumonia vaccinations, went up by more than 15 percent between 2014 and 2015.

While there were initial fears when ACOs were introduced that they would drive consolidation and favor larger health systems, Health Affairs recently found that smaller, physician-led ACOs were actually more likely to hit their targets under the program. “This result is a cautionary note given the trend toward mergers and consolidations among health systems,” says the publication. “Consolidation and larger size do not necessarily lead to the functional integration and efficiency needed to succeed under alternative payment models.”

Modern Healthcare points out that despite the improved savings and quality measures, only one-third of participants in ACOs saved enough to qualify for bonus payments this year, so enthusiasm for the model is mixed among the provider community. However, the physician-in-chief at an ACO health system told the publication that the results “basically confirm that the ACO model is capable of working.”

As these innovative providers continue finding ways to save, their insights will likely benefit the entire industry – through 2018 and beyond.