Bending The Spending Curve By Altering Care Delivery Patterns: The Role Of Care Management Within A Pioneer ACO

By John Hsu, Mary Price, Christine Vogeli, Richard Brand, Michael E. Chernew, Sreekanth K. Chaguturu, Eric Weil and Timothy G. Ferris
Health Affairs, May 2017

We examined the impact of patient participation in a Pioneer ACO and its care management program on rates of emergency department (ED) visits and hospitalizations and on Medicare spending.

From the Study Results

Overall participation in the ACO was associated with a reduction in Medicare spending of $14 per participant per month, a decline of 2 percent. This association was not significantly different from no change, but the magnitude of the decline was comparable to estimates in previous studies.

From the Limitations

The analyses also focused on Medicare spending but did not assess total spending, including program costs. To our knowledge, no other study of ACOs has included program costs in its analysis.

From the Discussion

There were modest overall ACO spending reductions, with magnitudes comparable to those of all ACOs as described in other published reports and generally consistent with the assessment of the Partners ACO by CMS.…


On the Ethics of Accountable Care Research

By Kip Sullivan, J.D.
The Health Care Blog, August 25, 2017

The paper I am examining is the third that Hsu et al. have published in Health Affairs about Partners’ Pioneer ACO, the second largest of the 32 ACOs that entered Medicare’s Pioneer ACO program in 2012.

They found that Partners’ ACO cut Medicare’s costs by a statistically insignificant 2 percent. This outcome is consistent with CMS’s data on the performance of Medicare ACOs, as well as the extremely rare studies of total spending by private-sector ACOs. The only papers seeming to contradict this bad news are two “studies” of simulated ACOs . We may infer from the literature that if ACO start-up and operating costs, including the costs of disease management programs, are taken into account, ACOs are raising total health spending.

However, in this third paper, Hsu et al. did not convey to their readers the impression I have just conveyed: Despite their insignificant results, they claimed Partners’ ACO is cutting costs. “Our major overall finding is that participating in an ACO and a care management program lowered utilization and spending,” they concluded.

Hsu et al. employed two tactics that lulled readers into thinking their data supported their claim that Partners’ ACO “lowered spending.” The first was to treat the statistically insignificant reduction in Medicare spending as if it were statistically significant. The second was to ignore the overhead costs incurred by CMS and Partners’ ACO, a problem that occurs so frequently I have proposed giving it a name – the “free-lunch syndrome.”

Hsu et al. reported that Partners’ ACO cut Medicare spending on beneficiaries attributed to the ACO by CMS during 2012 and 2013 by a statistically insignificant 2 percent. As the authors put it, “this association was not significantly different from no change” (p. 880). Yet the authors treated this 2 percent difference as if it were significant. Throughout the paper they claimed Partners’ ACO had lowered “Medicare spending.” They did so in the title (“Bending the spending curve….”), the abstract (“ACO participation had a modest effect on spending”), and in the text (see the quote above, as well as, “There were modest overall ACO spending reductions….” and, “This study provides some evidence of how one large … ACO appears to have achieved its stated savings….”).

Even if the 2-percent savings had been statistically significant, the authors should have subtracted from the claimed savings the cost of the interventions that led to the savings. These costs fall into two categories: Those CMS incurred to run the Pioneer program and those Partners’ ACO incurred attempting to achieve savings. Not reporting these offsetting costs made it easier for Hsu et al. to mislead readers into accepting their statement that Partners’ ACO “bent the cost curve.”

Hsu and his co-authors in fact warned readers that they intended to ignore all “program costs” incurred by the ACO, CMS or any other entity, that is, all costs that didn’t require reimbursement by Medicare under Parts A, B or D. They didn’t say why. The only explanation they offered was, “To our knowledge, no other study of ACOs has included program costs in its analysis.” This is true. The vast majority of American health policy researchers think it’s totally appropriate to ignore program costs when analyzing the impact of ACOs. Moreover, they think that if their limited analysis shows the ACO cut Medicare’s gross spending it’s ok to state repeatedly the ACO “bent the cost curve” or “lowered spending.”

The data in Hsu et al.’ paper is useful even if it is incomplete. It contributes to a growing body of evidence indicating that ACOs cannot cut total spending, in part because ACOs cannot focus. They are measured on their ability to cut the cost of an entire population by unspecified means rather than on their ability to cut the cost of a clearly defined slice of their sickest “attributees” by clearly defined methods.

My criticism of Hsu et al. is their misuse of their data. They implied statistically insignificant results were significant, and by stating over and over that Partners’ ACO cut “spending” they misled readers into thinking they had measured total costs when they hadn’t.

Footnote 8:

I encourage readers to peruse RTI’s evaluation of the CMP (care management program) to get a clearer view of the complexity and expense of Partners’ CMP program. To give you just a taste of the resources Partners is investing now for the 4,000 CMP enrollees examined by Hsu et al., consider these excerpts from RTI’s report describing elements of the program for the 2,000 CMP enrollees during 2006-2009:

*  “Eleven nurse case managers [each of whom worked with about 200 patients] who received guidance from the program leadership and support from the project manager, an administrative assistant, and a community resources specialist” (p. 7);

*  “a social worker to assess the mental health needs of CMP participants” (p. 6);

*  “a mental health team director, clinical social worker, two psychiatric social workers, and a forensic clinical specialist (M.D./J.D.), who follows highly complex patients with issues such as legal issues, guardianship and substance abuse” (p. 10);

*  “a pharmacist to review the appropriateness of medication regimens” (p. 6);

*  “home delivery of medications five days per week” (p. 7);

*  “a nurse who specialized in end-of-life-care issues” (p. 7);

*  “a patient financial counselor who provided support for all insurance related issues” (p. 7);

*  “The clinical team leader provided oversight and supervision of case managers” (p. 8);

*  “The medical director provided oversight and day to day management of MGH’s CMP….” (p. 8);

*  “MGH developed a series of clinical dashboards using data from the MGH electronic medical record …, claims data, and its enrollment tracking database” (p. 8);

*  “MGH provided [200] physicians with a $150 financial incentive per patient per year to help cover the cost of physician time for [CMP-related] activities” (p. 8);

*  “a designated case manager position to work specifically on post discharge assessments to enhance transitional care monitoring” (p. 9);“ and

*  “a data analytics team to develop and strengthen program’s reporting capabilities” (p. 10).…

Everywhere you turn these days you see articles stating that we need to shift from paying for volume of health care and pay for value instead. They contend that new payment models, such as accountable care organizations, are doing precisely that. Yet evidence for increased value – lower costs and higher quality – is lacking.

The Hsu et al. article from Health Affairs (above) has been cited extensively for demonstrating that this approach is resulting in savings. Yet in the article the authors state, regarding the reduction in Medicare spending, “This association was not significantly different from no change.” Kip Sullivan’s critique details the problems with the conclusions and is well worth reading if you want to better understand health policy chicanery, or at least unrealized health policy wishes camouflaged as health policy science.

This is more than an annoyance. In the past month a multitude of articles have called for rejecting the lure of single payer and instead moving ahead with improving the Affordable Care Act. Many of these articles contend that new payment models are bringing us the cost efficiencies that we need, and so we do not need to resort to the disruptive changes of transitioning to single payer. “There are many ways we can get to a universal system,” they keep telling us.

If you read the health policy literature extensively and carefully you will find that many noted policy experts who have been working on these financing concepts from the beginning have been disappointed with the results. The models are not reducing costs significantly and the improvements in quality are negligible. Nevertheless, the attitude amongst them seems to be that we should continue with these studies, perhaps trying various modifications of the models to see if maybe something will eventually come of it.

But the lay media have not picked up on this. The reporting fad of the day is that we can get to a universal system that is affordable without having to resort to Medicare for all.

From the experience of other nations we already know that single payer would save us hundreds of billions of dollars by reducing administrative waste while using other single payer tools to achieve greater value and equity in our health care system.

In his full article, available at the link above, Kip Sullivan asks a series of questions regarding the ethics of this particular health policy assessment. When the policy community, supported by the lay press, advocates for health care reform that has not held up to scrutiny while rejecting a proven model that does work – single payer – they are indeed compromising ethics, even if some don’t quite understand that.

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