ACOs provide only modest savings for Medicare populations

Accountable care organizations (ACOs) can cut hospital costs for Medicare enrollees, but the savings are more like the change you find behind the couch.cushions, according to researchers at the Dartmouth Geisel School of Medicine, who published their results in JAMA Internal Medicine.

Researchers studied two cohorts: The Medicare population in general and medically vulnerable Medicare enrollees who had at least three chronic or serious medical conditions. Their costs were compared prior to and after they entered an ACO environment.

Overall costs were reduced $34 per quarter for the general Medicare enrollees once they entered the ACO. For the medically vulnerable, their costs dropped $114 per quarter, according to the study.

Such savings, although modest, have proven fairly formidable across the ACO universe. Medicare ACOs saved the program a total of $411 million in 2014, although few participating providers wound up with incentive bonuses. That in part prodded the Centers for Medicare & Medicaid Services to propose changes earlier this year to the Shared Savings Program, including using regional data as opposed to national data when revising benchmarks for participants.

Overall the study found that hospitalizations and ER visits also dropped for both groups, but in increments. Among those in the overall Medicare group, hospitalizations dropped 1.3 per 1,000 patients each quarter while ER visits dropped by three per 1,000. Among those considered clinically vulnerable, hospitalizations dropped 2.9 per 1,000 patients per quarter and 4.1 per 1,000 patients per quarter.

- read the study abstract