Studies show ACOs drive down spending regardless of structure

Dive Brief:

  • Two recent studies published by JAMA Internal Medicine shed light on progress made by accountable care organizations (ACOs), showing that the savings they produce increase with time.

  • Post-acute spending at 114 ACOs fell by 9% from 2012 to 2014, which resulted in savings of $106 per beneficiary, according to one study.

  • An investigation into two separate ACOs in Oregon and Colorado revealed that, despite significant differences in structure, both were able to produce savings from 2010 to 2014.

Dive Insight:

While there is a lot of talk surrounding an impending legislative battle over health reform, there has been little discussion about the future of ACOs. However, based on bipartisan legislation like MACRA, value-based healthcare initiatives are likely to continue. Fostering these initiatives could even produce significant savings, according to the studies published by JAMA Internal Medicine.

To determine how ACOs have affected post-acute spending, researchers compared claims from Medicare fee-for-service patients to those in ACOs. Savings were attributed to the fact that more ACO patients were sent home following acute care rather than to a facility. Savings were especially large in skilled nursing facilities and grew over time. Other research supports the idea that post-acute care costs depend on where patients are treated.

In the other study, researchers investigated how differences in ACO structure affected savings. In 16 ACOs established in Oregon in 2012, provider groups received a global budget and were responsible for all patient care, meaning they accepted full financial risk. In seven ACOs established in Colorado in 2011, provider groups received monthly funding on a per-member basis and accepted no financial risk. Despite differences in how each of these ACOs were structured, both produced similar savings.

Dr. Carrie Colla and Dr. Elliot Fisher wrote in a separate editorial for JAMA Internal medicine about the policy implications of the two studies. The results indicate a contradiction when it comes to incentives. ACOs in Colorado showed that strong incentives were not necessary to improve spending outcomes while that was not necessarily the case in Oregon. They added that, despite a decrease in post-acute spending, additional gains are achievable, according to Medscape.

Filed Under: Payer Policy & Regulation