More than half of ACOs show savings

Accountable care organizations are helped by the use of health information technology

"Off to a strong start," is how CMS officials characterized the results so far of three initiatives to boost healthcare quality while achieving savings.

CMS released Jan. 30 interim financial results for select Medicare Accountable Care Organization initiatives, a saving analysis for Pioneer ACOs, results from the Physician Group Practice demonstration, and expanded participation in the Bundled Payments for Care Improvement Initiative. 
Savings from both the Medicare ACOs and Pioneer ACOs totaled more than $380 million.

"These innovative programs are showing encouraging initial results, while providing valuable lessons as we strive to improve our nation’s health care delivery system," HHS Secretary Kathleen Sebelius said in announcing the numbers. "Today’s findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth."

ACOs, a model underpinned by the use of health information technology, are designed to achieve savings over several years, not always on an annual basis, CMS officials stress.

[See also: ACO touts early financial wins.]

However, the interim financial results for the Medicare Shared Savings Program ACOs show that, in their first 12 months, nearly half -- 54 of 114 -- of the ACOs that started program operations in 2012 had lower expenditures than projected.

Of the 54 ACOs that exceeded their benchmarks in the first 12 months, 29 generated shared savings totaling more than $126 million.
Also these same ACOs generated a total of $128 million in net savings for the Medicare Trust Funds.

ACOs share with Medicare any savings generated from lowering the growth in healthcare costs while meeting standards for high quality care.  Final performance year-one results will be released later this year.

Pioneer ACOs generated gross savings of $147 million in their first year while continuing to deliver high quality care, according to CMS.  Results showed that of the 23 Pioneer ACOs, nine had significantly lower spending growth relative to Medicare fee for service while exceeding quality reporting requirements.

[See also: Health giant inks new ACO contract.]
 
"All organizations participating in the MSSP and Pioneer programs deserve credit for stepping up to the plate and blazing a trail that can help other providers and CMS in moving delivery system reforms forward," said Blair Childs, senior vice president of public affairs at Premier healthcare alliance, in a statement.

"Providers participating in the MSSP and Pioneer programs ramped up at impressive speeds to meet the needs of Medicare beneficiaries, building out modern ACO infrastructure, HIT, governance and care delivery models," he added. "Considering the newness of the programs, as well as the high degree of risk involved in adopting new models of care, the CMS-released savings figures for the MSSP and Pioneer programs demonstrate significant early progress, as more than half of the participants generated savings."

CMS also released results for the Physician Group Practice Demonstration initiatives, which offered incentive payments for delivering high-quality, coordinated health care that generates Medicare savings.

The Physician Group Practice Demonstration evaluation report confirmed overall savings over the five year experience with seven out of 10 physician group practices earning shared savings payments for improving the quality and cost efficiency totaling $108 million over the course of the demonstration. The participating organizations consistently demonstrated high quality of care on a broad range of chronic disease and preventive care measures, according to CMS.