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Are ACOs working?

Written By: Jason Shafrin - Mar• 12•14

Maybe. An press release from CMS is very upbeat on ACOs. What do the numbers say?
Farzad Mostashari and Ross White review the CMS report and find that results were mixed:

Of the 114 ACOs in the program, 54 of the ACOs saved money and 29 saved enough money to receive bonus payments. The 54 ACOs that saved money produced shared net savings of $126 million, while Medicare will see $128 million in total trust fund savings.

There was not a large difference between the success rate of physician-led and hosptial-led ACOs. 29% of the physician-led ACOs achieved savings than expected compared to 20% for hospital-sponsored ACOs. However, this difference was not statistically significant.

Another question is: are these savings a one-time change or can decreases in spending growth continue into the future. Some evidence indicates that the latter is more likely. Mostashari and White claim that “there is some evidence that ACOs in the highest cost states are more likely to be achieve shared savings. The states with the most expensive (risk adjusted and standardized) regions for Medicare are Florida, Louisiana, Mississippi, and Texas.” Thus, the biggest ACO savings could be simply a regression to the mean phenomenon.

Further, little evidence is available on the whether cost savings decreased patient health. Although the ACOs do use a number of quality measures, most of these are process of care measures; the outcome measures used are generally crude.

Are ACOs working? The question has not yet been fully answered.

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  1. Texas Medicare Plan G

    Are ACOs working? « Healthcare Economist

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