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Medicare ACO Program Savings Not Tied To Preventable Hospitalizations Or Concentrated Among High-Risk Patients

Author: J. Michael McWilliams, Michael E. Chernew, Bruce E. Landon
$15.00

It has been widely assumed that better management and coordination of care for chronic conditions and high-risk patients would be the leading mechanisms for achieving savings in accountable care organizations (ACOs), specifically by reducing acute care needs through enhanced outpatient and preventive care. We examined the extent to which changes in spending and hospitalizations for ACO patients in the Medicare Shared Savings Program (MSSP) have been consistent with this expectation. By 2014, participation in the MSSP was associated with significant reductions in total Medicare fee-for-service spending for ACO patients but with proportionately smaller reductions in hospitalizations and some increases in hospitalizations for ambulatory care–sensitive conditions. In addition, spending reductions were not clearly concentrated among high-risk patients: Reductions for those patients accounted for only 38 percent of the total reduction among ACOs entering the MSSP in 2012, and reductions among 2013 MSSP entrants were almost entirely concentrated among lower-risk patients. These findings suggest that, on average, care coordination and management efforts focused on ambulatory care–sensitive conditions and high-risk patients have not been the major drivers of early savings in the MSSP.

It has been widely assumed that better management and coordination of care for chronic conditions and high-risk patients would be the leading mechanisms for achieving savings in accountable care organizations (ACOs), specifically by reducing acute care needs through enhanced outpatient and preventive care. We examined the extent to which changes in spending and hospitalizations for ACO patients in the Medicare Shared Savings Program (MSSP) have been consistent with this expectation. By 2014, participation in the MSSP was associated with significant reductions in total Medicare fee-for-service spending for ACO patients but with proportionately smaller reductions in hospitalizations and some increases in hospitalizations for ambulatory care–sensitive conditions. In addition, spending reductions were not clearly concentrated among high-risk patients: Reductions for those patients accounted for only 38 percent of the total reduction among ACOs entering the MSSP in 2012, and reductions among 2013 MSSP entrants were almost entirely concentrated among lower-risk patients. These findings suggest that, on average, care coordination and management efforts focused on ambulatory care–sensitive conditions and high-risk patients have not been the major drivers of early savings in the MSSP.

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