Premier's ACO model makes big gains in Medicare savings

Premier is known primarily for its group purchasing prowess. But the Charlotte-based company is now showing its chops in the realm of population health.

Half of the Medicare participants in Premier's Population Health Management Collaborative accountable care organization qualified for shared savings payments. That compares to about 30 percent of the ACOs in the Pioneer and Medicare Shared Savings Program.

Indeed, had the traditional Medicare ACOs achieved the same results, they could have saved about $1.4 billion last year, compared to the more modest $466 million reported by the Centers for Medicare & Medicaid Services, according to an analysis (PDF) undertaken by Premier.

While Premier's ACOs make up 6 percent of all program participants, the analysis found they have contributed 22 percent of the $1.3 billion in total Medicare savings since 2012.

The Premier ACOs also outperformed the other ACOs by 2.5 percentage points in terms of quality and outcomes.

While the Medicare ACOs have been touted for their ability to save money and improve outcomes, they have been plagued with defections, particularly from the Pioneer ACO program. Many of the participants that dropped out say they have struggled to meet the demands put on them by the programs, as well as suffering significant financial losses.

However, experts say it is unlikely the ACO program will be going anywhere anytime soon, but they expect Medicare to make tweaks to the programs as time moves along.

“Succeeding within these models is challenging, but these results show that a shared mission, effective collaborative execution model, peer-to-peer benchmarking and performance improvement along the way can help some make the transition faster, with higher-quality outcomes,” Melissa Gerdes, M.D.,  vice president and chief medical officer for Methodist Health System in Dallas, a participant in Premier's Population Health Management Collaborative, said in a statement.

She added that Methodist's participation with the Premier program has helped save it $40 million in shared savings since 2012. “Being an MSSP ACO participant in Premier’s collaborative has positioned Methodist as a leader in value-based payment," Gerdes said.