Studies test accountable care organization cost savings

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Participation in Medicare and Medicaid ACOs may lead to modest gains.

Participation in Medicare and Medicaid accountable care organizations may lead to modest gains, but those benefits grow over time, according to a pair of new studies.

The first study, led J. Michael McWilliams, M.D., Ph.D., of Harvard Medical School and published in JAMA Internal Medicine, examined a snapshot of Medicare ACOs—a random 20% sample of beneficiaries—and found that such organizations notably reduced post-acute care costs. Between 2012 and 2014, the study found, the 114 ACOs included in the research cut post-acute spending by 9%, or just over $100 per beneficiary, compared with a non-ACO control group.

The sample included data on more than 8.3 million hospitalizations and more than 1.5 million stays in skilled nursing facilities. The spending cuts, according to the researchers, can be linked to patients being treated at home or reductions in length of stay.

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The second study, also published in JAMA Internal Medicine, compared the results of two different Medicaid ACOs located in Colorado and Oregon. Colorado’s Accountable Care Collaborative brought together seven regional care collaborative groups that are paid on a per-member, per-month basis. In this form, there is no upside or downside financial risk for providers, according to the study, which was led by K. John McConnell, Ph.D., of the Oregon Health & Science University in Portland.

In the Oregon model, however, a $1.9 billion investment from the federal government was used to create 16 coordinated care organizations, which were each responsible for all patient care under a global budget and assumed full financial risk. The study found that despite the differences in approach, expenditures for selected services—ones that have standardized codes across states—dropped by similar levels. In Oregon, the study also found some improvements in utilization, access and quality.

In an invited commentary accompanying the studies, the editorial’s authors note that the two pieces of research add to the growing evidence that ACOs do lead to quality improvements and cost reductions, but that there is still much to learn.

“Nevertheless, we know little about the effects of ACOs on patients’ health and quality of life,” they write. “Perhaps most important for ACO leaders and the long-term success of these programs, we know little about the key ACO capabilities that are important to ensuring their success in different organizational or market contexts.”