Pioneer Accountable Care Organizations succeed in improving care, lowering costs

Centers for Medicare and Medicaid Services, July 16, 2013

Today, the Centers for Medicare & Medicaid Services (CMS) announced positive and promising results from the first performance year of the Pioneer Accountable Care Organization (ACO) Model, including both higher quality care and lower Medicare expenditures.  Made possible by the Affordable Care Act, the Pioneer ACO Model encourages providers and caregivers to deliver more coordinated care for Medicare beneficiaries. This model, launched by the CMS Innovation Center, is part of the Affordable Care Act’s efforts to realign payment incentives, promoting high quality, efficient care for Medicare beneficiaries.  ACOs, including the Pioneer ACO Model and the Medicare Shared Savings Program, are one way CMS is providing options to providers looking to better coordinate care for patients and use health care dollars more wisely.

“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” said CMS Administrator Marilyn Tavenner.  “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”…


A Pillar of Obamacare’s Cost-Saving Effort Falls Short

By Devin Leonard
Bloomberg Businessweek, July 16, 2013

It’s no secret that the Obama administration’s effort to roll out health-insurance exchanges in every state is turning out to be more challenging than expected. Its campaign to lower health costs isn’t faring any better. On Tuesday, the Centers for Medicare and Medicare Services announced middling first-year results for the administration’s highest profile cost-control effort: the Pioneer Accountable Care Organization Model.

Obamacare supporters have long promised that Accountable Care Organizations — groups of hospitals and doctors that tend to large flocks of Medicare patients, with an eye toward keeping them out of the hospital — would be integral to bringing down the nation’s health-care costs. ACOs are supposed to come up with innovative ways of keeping patients in better shape by focusing on preventive measures while saving money in the process. Under the plan, the ACOs themselves are to be rewarded with the share of the savings they generate.

Thirty-two health care provider groups signed up for the pioneer program intended to promote the new model, but the Centers for Medicare and Medicare Services said Tuesday that only 13 of them generated enough savings to qualify for a cut. Two participants actually lost money instead.

The news wasn’t all bad. The pioneers produced better-than-average results on cholesterol control for diabetes patients. “Overall, we are very excited about the results,” Patrick Conway, chief medical officer for the Centers for Medicare and Medicare Services, told the Wall Street Journal. But a significant percentage of the pioneers weren’t so thrilled, and nine are slated to exit the program.

It’s much too soon to call the pioneer program a failure. It’s also premature to say the ACO model is one that will save vast amounts sums of money. That hasn’t stopped some of the law’s staunchest supporters, who might want to temper their rhetoric after Tuesday’s report.…


Pioneer ACOs Year One: On The Path To A Learning Health Care System

By Douglas Hastings
Health Affairs Blog, July 17, 2013

The Pioneer Model should be seen as part of a crucial phase of testing alternative payment and delivery models in an effort to achieve greater value in health care.  One year’s results should not be seen as a definitive outcome or leading to a dispositive conclusion, but rather as a valuable source for learning.

The participating providers are required to be both financially and clinically integrated.  The ACOs must, among other core attributes, have an effective governance and leadership structure, have the ability to apply evidence-based medicine and care coordination processes, meet quality measures, have a savings distribution formula, develop a robust electronic health record infrastructure, and, importantly, be able to effectively engage patients in their care and their health.

ACO skeptics clearly remain.  Among the doubts and cautions that have been raised are that ACOs will drive insufficient change in physician behavior and patient engagement, result in insufficient savings, create a specialist (and thus patient) backlash, suffer from lack of agreement over measures and metrics, and drive up prices due to consolidation.  These are legitimate concerns.  But such concerns should not mean that the testing should slow down.  Rather, in my view, it should accelerate, given some early positive results and the ongoing cost and quality challenges faced by our health care system.…

The Pioneer Accountable Care Organizations (ACOs) were already existing health care organizations that were selected as potentially exemplary models that could show the rest of the nation how well ACOs can work to achieve higher quality at lower costs. We now have a report from CMS of the initial “successes” of this model. Although the rhetoric from CMS is quite rosy, most reporters were not impressed, as the Bloomberg Businessweek response demonstrates.

Considering the added administrative hassle, the savings were negligible, with only 13 of the 32 organizations saving enough to receive “shared savings” from CMS, and 2 actually lost money.

Even the supposed quality gains were unimpressive since they represented only 15 measurements which the organizations were told in advance would be used to determine whether or not they met quality standards. These teach-to-the-test gains can hardly represent the overall quality status of each organization.

It is time for our policy makers to stop wishing that the ACO model is the nirvana of health policy and get on with endorsing a proven model of enhancing quality while controlling costs – a single payer national health program – a model that would have the additional benefit of actually covering everyone.