IHD Journal Watch: ACOs vs. FFS: Spending, Utilization and Patient Experience

Journal Source: Nyweide D, Lee W, Cuerdon T, Pham H, Cox M, Rajkumar R, Conway P. Association of Pioneer Accountable Care Organizations vs Traditional Medicare Fee for Service With Spending, Utilization, and Patient Experience. JAMA. Published online May 04, 2015.

Background: This study examined whether fee-for-service (FFS) Medicare beneficiaries cared for by physicians participating in Pioneer Accountable Care Organizations (ACOs) had smaller increases in spending and utilization than other FFS beneficiaries while retaining similar levels of care satisfaction in the first 2 years of the Centers for Medicare & Medicaid Services’ Pioneer ACO Model. Results showed that in 2012 and 2013, increases in total spending were less for beneficiaries aligned with Pioneer ACOs than for comparison populations. Compared with other Medicare beneficiaries, ACO-aligned beneficiaries reported higher mean scores for timely care and clinician communication.

Analysis: 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 physician services utilization (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”? With year-two savings less than half of year-one savings, it would be interesting to carry out this analysis in subsequent years to determine the opportunity for sustainable savings over time. Still, the authors estimate 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 beneficiaries in the FFS and Medicare Advantage programs. This suggests that providers, given the right incentives, can simultaneously achieve at least two of the IHI’s Triple Aim goals.

However, of the original 32 Pioneer ACOs, 13 have left the program, switching to either the Medicare Shared Savings Program (MSSP) or some other shared-risk arrangement. For the ACO model to be sustainable over time, health system leaders and regulators must simplify the structure, performance and quality measures for participants while enhancing the incentives to achieve the desired goals.