Posted in Accountable Care, ACO, Triple Aim

ACOs in the Medicare Shared Savings Program (MSSP): Is There a Fix?

by Gregg A. Masters, MPH

The Center for Healthcare Quality and Payment Reform just released ‘How to Fix the Medicare Shared Savings Program‘ with lead author and long term managed health care industry veteran Harold D. Miller, its President and CEO. 

Some six (6) years into the Affordable Care Act (ACA) provisions specific to Accountable Care Organizations (ACOs) the results remain mixed at best, and like the serial tweaks made to the Medicare Advantage Program, now covering some 30% of Medicare beneficiaries, the underlying ACO structural characteristics and enabling health policy regulations remain ‘on the come‘ for this still nascent and evolving delivery system model.

For the many critics of ACOs as a form of an ‘HMO lite‘ in the fee-for-services Medicare market, with none of the channeling characteristics commonly associated with HMOs, this comes as no surprise.

In this just released report, Harold Miller weighs in on the fix he sees essential for the program to achieve it’s cost containment and quality improvement objectives.  The executive summary is posted below and the full report is available here.

Executive summary:

Rather than generating savings as expected, the Medicare Shared Savings Program (MSSP) has created losses for the Medicare program for four years in a row.

Calculations by the Centers for Medicare and Medicaid Services (CMS) appear to show that ACOs with downside risk produce higher savings than the “upside-only” ACOs. However, Medicare actually spends more per beneficiary in the downside risk ACOs than in other ACOs, with no difference in quality. Moreover, ACOs that have moved to the downside risk tracks have saved less after doing so.

The risk adjustment and benchmarking formulas used by CMS can penalize ACOs that serve higher-need patients and patients living in rural areas. The greater savings attributed to downside risk ACOs may have more to do with differences in the types of patients they see than differences in the way they deliver care.

Concerns about the problems with the risk adjustment and benchmarking methodologies in the MSSP have made many ACOs unwilling to enter the downside risk tracks. Requiring all ACOs to move to downside risk could force successful ACOs to leave the program, thereby reducing Medicare savings and harming the quality of care for millions of beneficiaries.

There are other options for modifying the Medicare Shared Savings Program in order to increase Medicare savings, including dropping ACOs from the program if they fail to achieve savings after two consecutive years, reducing shared savings payments for ACOs that incur losses before achieving savings, reducing the shared savings rate below 50% for Track 1 ACOs, and/or enabling ACOs to take accountability for the specific types of services they can control rather than placing them at risk for
total Medicare spending.

Neither shared savings nor shared risk payment models solve the fundamental problems in the fee-for-service payment system. As a result, it is unlikely the MSSP will ever result in significant savings or improvements in quality, and it has the potential to harm patients by rewarding providers that withhold necessary services.

Instead of continuing to modify the Medicare Shared Savings Program, CMS should focus on implementing Patient-Centered Alternative Payment Models that provide the resources physicians, hospitals, and other providers need to successfully address their patients’ healthcare needs while holding the providers accountable for those aspects of spending and quality they can control.

Twitter Dialogue on ACO Results Reported

Today on twitter there was a representative exchange from both sides of the ACO narrative which I’m posting below for context:

MANas8U's avatar

True! Yet innovation is not cheap + anything even moderately at scale in Medicare/Medicaid is definitely not cheap. Questions while innovating: What did we learn? How can we inform our future efforts? @policywonk1

danmunro's avatar

I would argue that the evidence is already in b/c the trajectory we’re on is easy to see – and forecast. Just labeling newer efforts of ‘cost containment’ as ‘innovation’ is like rearranging (in this case expensive) deck chairs.

danmunro's avatar

But that may be the same hymnal in title only: HC Reformation I don’t think #FFS is “an addiction” that needs #ACO or #VBP rehab and the evidence that #FFS works reasonably well around the world is compelling. We don’t need single-payer, but we absolutely need single-pricing.

A Sampling of ACO Leadership on the Center for Healthcare Quality and Payment Reform Report and Associated Remedies

Our Nation’s move from volume to value based care will not occur in one day. Transformation of our complex, misaligned and disjointed healthcare system will take the hard/smart work, dedication, risk and financial support from key stakeholders, including the largest being CMS. Transition to risk based/value based care is not an option, it is a necessity not only to save but successfully advance the US Health Care system. It is easier to point out problems, than to roll up our collective sleeves and develop innovative and outside the box solutions.  – Alex Foxman, MD, FACP, CMO, President and Co-Founder National ACO, LLC

The state of Florida is a great example of ACOs having success.  I believe this is true because we already have a vibrant managed care market.  Medicare Advantage makes a lot of people money but has not proved it has saved any.  It has only served to risk adjust a population for higher revenues.  ACOs, as originally designed, may only be ‘transitional’ but they are an important step toward shifting from volume to value payment models. We should expect the models will continue to evolve.  This shift is a jog not a sprint. The goal and focus should be on the “shift” not which model and flavor is the stepping stone along the way. – Nicole Bradberry, CEO and Chair of Board, Florida Association of ACOs 

ACOs in Florida reduced expense by $365,809,069, earned shared savings payments of $178,447,886 with a net benefit to the Medicare trust fund of $187,361,183. MSSP is working in Florida! We’re concerned that the success of the MSSP is being evaluated based aggregate ACO performance which includes ACOs who are not putting forth adequate effort. I know of at least 7 ACOs that have 2 or less employees. That’s not enough effort to make ANY business model work! Unfortunately their results are tabulated with others and cause the program to be inaccurately evaluated. We look forward to the required transition to downside risk as it will require those without much commitment to drop out. If you drop the minimum effort ACOs, we expect the aggregate ACO results will look different. This is PY 2016 data… –  David Klebonis, Chief Operating Officer, Palm Beach Accountable Care Organization & Chief Operating Officer, South Florida Accountable Care Organization 

One definition of literal fantasy requires only that we accept a single non-reality, after which the rest of the story becomes quite plausible. If that be the case, Mr. Miller has written a Best Seller. His entire analysis assumes that the CMS “Shared Savings” formulas reflect reality, when those of us that have really crunched the numbers know this is far from the truth.

Intentionally or not, CMS has built significant savings for the Trust Fund into the benchmark methodologies for both MSSP and NextGen. These range from the actuarial fallacies inherent in continuous attribution, successful ACO market share effects on the “Benchmark”, National Efficiency ratios that divert Benchmark dollars from high attribution areas to low attribution areas, risk score caps, automatic “discounts” and much, much more.

Still, it seems that our Florida ACOs consistently overcome the increasing headwinds and succeed. Additionally, CMS recognizes the problems in their own Benchmarking models and has tweaked these year after year, including the latest Proposed Rule submitted by MSSP to OMB earlier this month. I fear Mr. Miller is whistling past the graveyard on this one.

For a glimpse into a few of the methodology problems, see ‘Regional Benchmarking or Regional Bonus? Sustainability in the Medicare Shared Savings Program‘. – Richard J. Lucibella, CEO, Accountable Care Options

 

A Continued Search for Answers and Business Models

Further context sourced from the Florida Association of ACOs annual conference last year was provided by Aledade co-founder and CEO and former National Coordinator for Health Information Technology at the Office of the National Coordinator Farzad Mostashari, MD here.

Weigh In

So what do you think? Please offer your thoughts in the comments section. This is a dialogue well worth a broader exchange as our industry evolves perhaps even ‘pivots’ from it’s near term PCMH or ACO roots to a the valued based healthcare model – one that many refer to as a ‘Rorschach test’ of sorts – where any projection of what constitutes a value based model will do.
Please feel free to post any resources that support your take and we’ll happily include via our social reach. If any of you are inspired to author a guest post with references of citations, we’re happy to include at ACO Watch.

 

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Posted in Accountable Care, ACO, Affordable Care Act

Center for Medicare and Medicaid Services Releases Accountable Care Organization Performance Results

by Gregg A. Masters, MPH

Friday, October 27th, the Center for Medicare and Medicaid Services (CMS) released details for participating Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program (MSSP) for the 2016 performance year.  For reporting ACO results view the entire report here.

The National Association of ACOs (NAACOs) weighed in below:

The new results demonstrate the value of a premier Medicare alternative payment model and include a higher rate (56 percent)* of MSSP ACOs generating savings than ever before and an almost equal proportion as last year of ACOs that earned shared savings (31 percent).

This public update follows previously posted results for Pioneer ACOs, the Next Generation ACO cohort and the Comprehensive End Stage Renal Disease ACO (ESRD) care model here.

In table form, the results are summarized below:

All in, participating ACOs generated $843 million in gross program savings with a modest net savings of $78.6 million for Medicare in 2016, in addition to material gains in quality scores for aligned ACO Medicare beneficiaries.

While Clif Gaus, NAACOS CEO notes:

These results show the growing success of ACOs, which is a positive trend that should not be ignored. A lot has been accomplished in a relatively short amount of time, and ACOs are on the front line of redesigning healthcare delivery. This is a moment to celebrate them and their hard work.

The ACO ‘Jury’ Is Still Is Out

Given the range of models, risk assumed or gain sharing distributed operating results in a program that some still see as fundamentally ill equipped in a predominant fee-for-services market to materially change physician and beneficiary behavior – and thus enable the elusive ‘triple aim‘ – many in the health policy area including select ACO operators remain convinced to maximize impact the ACO model will ultimately morph into the more robust Medicare Advantage operating platform.

Perhaps the ‘stealth play’ in the mix is the potential upside of Next Generation ACOs to fully leverage their competitive advantages (3 day SNF waiver, telehealth visits, relaxed supervision requirements for post hospital discharge visits and the move to all inclusive population based payments) can up-level both their game AND improve outcomes at lower per capita costs?

On the next episode of This Week in Accountable Care, our very special guest is former Acting Administrator of CMS Andy Slavitt, now Senior Advisor to the Bipartisan Policy Center. Andy was initially part of the ‘fix it dream team‘ that righted the failed launch of Healthcare.Gov, and then presided over the administration of the Affordable Care Act.

Andy is rather familiar with the original intent of the ACA, its many ‘working parts’ and the bumps in the road to perfect the law via provider input, updated rule making and policy refinements.

We’ll get Andy’s take on a range of issues from the political environment to conflicting health policy guidance including broad brush advice to ACO operators.

Join National ACO co-founders Andre Berger, MD and Alex Foxman, MD as we engage this visionary and accomplished entrepreneur turned public service official in critical dialogue impacting the transformation of our industry from its fee-for-services roots to a new model based on a value and patient centricity.

 

Posted in Accountable Care, ACO, Affordable Care Act, Triple Aim

ACOs Fudging the Numbers?

by Gregg A. Masters, MPH

I came across this piece on the Healthcare Blog penned by Kip Sullivan, Esq, critiquing this article posted in Health Affairs last May ‘Bending The Spending Curve By Altering Care Delivery Patterns: The Role Of Care Management Within A Pioneer ACO‘. Sullivan raises valid points as the the legitimacy of claiming or inferring statistically insignificant results as a meaningful contribution of the subject ACO (a Partners Health sponsored venture) to ‘bending the cost curve’.

Sullivan un-bundles his argument effectively and raises issues for the industry writ large – including participating ACOs, their sponsors, the regulatory crew at both CMS and CMMI – and even the health policy press covering the sector.

I post the first few paragraphs of the piece below, for full reference the entire article on the Healthcare Blog is accessible via On the Ethics of Accountable Care Research‘.

  • Is it ethical for health policy researchers to claim that a Medicare ACO reduced “spending” by 2 percent if the reduction was not statistically significant?
  • Is it ethical for them to do so if they made no effort to measure the cost to the ACO of generating the alleged 2 percent savings nor the cost to Medicare of giving half the savings to the ACO?
  • Does it matter that the researchers work for the flagship hospital within the ACO that was the subject of their study?
  • Does it matter that the ACO and the flagship hospital are part of a huge hospital-clinic chain that claims its numerous acquisitions over the last quarter-century constitute not mere empire-building but rather “clinical integration” that will lower costs, and the paper lends credence to that argument? 
  • Is it ethical for editors to publish such a paper? Is it ethical to do so with a title on the cover that shouts, “How one ACO bent the cost curve”?

These questions were raised by the publication of a paper  by John Hsu et al. about the Pioneer ACO run by Partners HealthCare System, a large Boston hospital-clinic chain, in the May 2017 edition of Health Affairs. Of the eight authors of the paper, all but two teach at Harvard Medical School and all but two are employed by Massachusetts General Hospital (MGH), Partners’ flagship hospital and Harvard’s largest teaching hospital. [1]

Partners has been on a buying and ….

Comment

As someone who’s been in this dance since the mid 70s (PSROs, HSAs, HMOs, IPAs, PPOs, EPOs & all derivative plays) launched into Medicare risk via TEFRA (the Tax Equity and Fiscal Accountability Act) which introduced us to ‘Medicare Choice’ the for-runner of Medicare Advantage, I can say Sullivan’s critique of fully ‘burdening‘ ALL transformational efforts is rarely – if ever – factored into the volume to value pivot ‘investment calculus‘ of the effects of the intervention (in this case a Pioneer ACO) on the national spend.

It should be noted, the entire managed care industry can be assessed a gigantic collective FAIL for that matter as well. Since managed care penetrated ‘mainstream medicine‘ principally via extension of the HMO model typically on an IPA (independent practice association) chassis (vs. group or staff models) with the exception of a brief period in the 90s premiums continue their relentless upward march; while most payors continue to write commercial business only via an enterprise and industry wide cost shifting (risk transfer) charade. The tacit admission that there is no there there in the prevailing health insurance industry zeitgeist. They’ve proven they can NOT manage clinical risk, period.

So Kip, you might want to go a little lighter on those on the front lines trying to tame the ‘rapacious appetite’ of our ‘healthcare borg‘!

 

 

Posted in Accountable Care, ACO, Affordable Care Act

The NextGen ACO: Another Round Opens

by Gregg A. Masters, MPH

The Centers for Medicare and Medicaid Innovation has announced the results of its ‘continuous learning‘ commitment model wherein ‘field reports‘ including provider comments and open door inputs are materially incorporated into tweaks of the Medicare Shared Savings Program (MSSP) as risk is progressively adopted by participating ACOs. This ‘new round’ iteration no doubt includes ‘lessons learned‘ from the Pioneer ACO Program including the many ‘exits’ and risk downgrades opted to date.

In summary, this round is:

‘..one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.’

screen-shot-2016-12-15-at-9-48-25-am
screen-shot-2016-12-15-at-9-48-47-am

screen-shot-2016-12-15-at-9-49-21-am

For complete information, see: ‘Next Generation ACO Model | Center for Medicare & Medicaid Innovation‘.

 

 

Posted in Accountable Care, Affordable Care Act, health reform

TrumpCare: What We ‘Know’?

by Gregg A. Masters, MPH

You’ve no doubt heard the expression: ‘a picture is worth a thousand words‘.

Well courtesy of Oliver Wyman Health we have an infographic that segments key provisions of ‘TrumpCare’s‘ impact on providers. For original graphic, click here, and timely commentary, see:Special Election Coverage: What Now? The Impact of a Trump Presidency‘ via Partner Sam Glick.
TrumpCare Impact on providers

Oliver Wyman breaks down the identifiable components of TrumpCare’s impact on providers as follows:

TrumpCare screen-shot-2016-11-15-at-10-06-48-am screen-shot-2016-11-15-at-10-07-00-am

 

So much ‘meat’ remains to be put on the bone. Assuming anything whether ‘substantiated’ by previous campaign rhetoric or more recent ‘indicia‘ of what will emerge post ‘repeal and replace‘ or now ‘amend’ intentions relative to the ACA (see: ‘As the TrumpCare Pivots Begins‘) is without a doubt ‘faith based‘ reliance on what remains essentially an aggregate ‘hologram‘ of President-Elect Trump’s health reform agenda.

Stay tuned!

 

Posted in Accountable Care, Affordable Care Act, health reform

As the TrumpCare Pivots Begins

by Gregg A. Masters, MPH

Just when we thought it was safe to get back in the ‘white water of health reform‘ with needed fixes to this arguably complex and ambitious Act, surprise!

Against all odds and the best and brightest minds in the polling community welcome President-Elect Donald Trump and his litany of public statements regarding the intent to ‘repeal and replace’ the Affordable Care Actday one‘.

There is so much to this story that it’s difficult to fix a single point of entry, so we’ve sourced just a few of his public statements to frame the discussion which we’ll launch here but dive further into at This Week in Health Innovation and PopHealth Week with my colleagues Fred Goldstein and Douglas Goldstein.

Last week the Wall Street Journal posted a piece which began what some now expect to be the inevitable revisionist walk-back on the range and depth of what is realistically possible for the categorical ‘repeal and replace‘ rhetoric of this ‘holographic‘ candidate, now President-Elect Trump. Trump has been rather clear that the ACA aka ‘Obamacare’ is a ‘disaster‘ and must be thrown out and replaced with some ‘beautiful‘, ‘bigly‘ or who knows what else occurs to him as a politically feasible replacement alternative?

Some of my colleagues in the health policy and health-wonk space who’ve inexplicably (in my view, though see: ‘Dear Mr. President-Elect, about that Ryan Plan Thing‘) hitched to the TrumpTrain and it’s Rorschach projection of what is to become ‘TrumpCare‘ have stunned me by proffering seemingly apologist precedent for his now revisionist tune:

Just to make sure you have the facts.. 🙂 He said in early primaries and consistently after that that preexisting and all that stays in.

This was in response to the following tweet given the WSJ piece:

screen-shot-2016-11-14-at-9-46-31-am

Yet here’s just a sampling of public statements made during his campaign:

trumpcare1

trumpcare7

trumpcare12 trumpcare10 trumpcare8 trumpcare7 trumpcare6 trumpcare5 trumpcare4 trumpcare3 trumpcare2

trumpcare8

This portion of Trump’s health reform agenda is so target rich and ‘on the come‘ while campaign rhetoric meets the real world of policy and politics, so we intend devote a fair amount of coverage and commentary to TrumpCare’s emerging policy indicia.

Meanwhile, here is the vision posited to the people and the Congress of the President Elect’s health reform (similar as ‘guidance‘ offered though materially at variance with Obama’s ‘8 Principles’) submitted to Congress as parameters for the debates and negotiations eventually leading to the passage of ACA:

TrumpCare

Some related references here:

http://www.sciencemag.org/news/2016/11/here-s-some-advice-you-president-trump-scientists

Medical science policy in the U.S. under Donald Trump

We do in fact live in interesting times!

 

 

Posted in Accountable Care, ACO, Affordable Care Act

ACO Winners and Losers: A Quick Take

by Ashish K. Jha

Last week, CMS sent out press releases touting over $1 billion in savings from Accountable Care Organizations.

Here’s the tweet from Andy Slavitt, the acting Administrator of CMS:

NEW ACO RESULTS: physicians are changing care, w better results for patients & are saving money. Over $1B. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-25.html 

The link in the tweet is to a press release.  The link in the press release citing more details is to another press release.  There’s little in the way of analysis or data about how ACOs did in 2015.  So I decided to do a quick examination of how ACOs are doing and share the results below.

Basic Background on ACOs:

Simply put, an ACO is a group of providers that is responsible for the costs of caring for a population while hitting some basic quality metrics.  This model is meant to save money by better coordinating care. As I’ve written before, I’m a pretty big fan of the idea – I think it sets up the right incentives and if an organization does a good job, they should be able to save money for Medicare and get some of those savings back themselves.

ACOs come in two main flavors:  Pioneers and Medicare Shared Savings Program (MSSP).  Pioneers were a small group of relatively large organizations that embarked on the ACO pathway early (as the name implies).  The Pioneer program started with 32 organizations and only 12 remained in 2015.  It remains a relatively small part of the ACO effort and for the purposes of this discussion, I won’t focus on it further.  The other flavor is MSSP.  As of 2016, the program has more than 400 organizations participating and as opposed to Pioneers, has been growing by leaps and bounds.  It’s the dominant ACO program – and it too comes in many sub-flavors, some of which I will touch on briefly below.

A couple more quick facts:  MSSP essentially started in 2012 so for those ACOs that have been there from the beginning, we now have 4 years of results.  Each year, the program has added more organizations (while losing a small number).  In 2015, for instance, they added an additional 89 organizations.

So last week, when CMS announced having saved more than $1B from MSSPs, it appeared to be a big deal.  After struggling to find the underlying data, Aneesh Chopra (former Chief Technology Officer for the US government) tweeted the link to me:

@ashishkjha CMS always releases these results. They are on the website!

You can download the excel file and analyze the data on your own.  I did some very simple stuff.  It’s largely consistent with the CMS press release, but as you might imagine, the press release cherry picked the findings – not a big surprise given that it’s CMS’s goal to paint the best possible picture of how ACOs are doing.

While there are dozens of interesting questions about the latest ACO results, here are 5 quick questions that I thought were worth answering:

  1. How many organizations saved money and how many organizations spent more than expected?
  2. How much money did the winners (those that saved money) actually save and how much money did the losers (those that lost money) actually lose?
  3. How much of the difference between winners and losers was due to differences in actual spending versus differences in benchmarks (the targets that CMS has set for the organization)?
  4. Given that we have to give out bonus payments to those that saved money, how did CMS (and by extension, American taxpayers) do? All in, did we come out ahead by having the ACO program in 2015 – and if yes, by how much?
  5. Are ACOs that have been in the program longer doing better? This is particularly important if you believe (as Andy Slavitt has tweeted) that it takes a while to make the changes necessary to lower spending.

There are a ton of other interesting questions about ACOs that I will explore in a future blog, including looking at issues around quality of care.  Right now, as a quick look, I just focused on those 5 questions.

Data and Approach:

I downloaded the dataset from the following CMS website: https://data.cms.gov/widgets/x8va-z7cu and ran some pretty basic frequencies.

Here are data for the 392 ACOs for whom CMS reported results:

Question 1:  How many ACOs came in under (or over) target?

Question 2:  How much did the winners save – and how much did the losers lose?

Table 1.

Number (%)

Number of Beneficiaries

Total Savings (Losses)

Winners

203 (51.8%)

3,572,193

$1,568,222,249

Losers

189 (48.2%)

3,698,040

-$1,138,967,553

Total

392 (100%)

7,270,233

$429,254,696

I define winners as those organizations that spent less than their benchmark.  Losers were organizations that spent more than their benchmarks.

Take away – about half the organizations lost money and about half the organizations made money.  If you are a pessimist, you’d say, this is what we’d expect; by random chance alone, if the ACOs did nothing, you’d expect half to make money and half to lose money.  However, if you are an optimist, you might argue that 51.8% is more than 48.2% and it looks like the tilt is towards more organizations saving money and the winners saved more money than the losers lost.

Next, we go to benchmarks (or targets) versus actual performance.  Reminder that benchmarks were set based on historical spending patterns – though CMS will now include regional spending as part of their formula in the future.

Question 3:  Did the winners spend less than the losers – or did they just have higher benchmarks to compare themselves against?

Table 2.

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings (Losses)

Winners (n=203)

$10,580

$10,140

$439

Losers (n=189)

$9,601

$9,909

-$308

Total (n=392)

$10,082

$10,023

$59

A few thoughts on table 2.  First, the winners actually spent more money, per capita, then the losers.  They also had much higher benchmarks – maybe because they had sicker patients – or maybe because they’ve historically been high spenders.  Either way, it appears that the benchmark matters a lot when it comes to saving money or losing money.

Next, we tackle the question from the perspective of the U.S. taxpayer.  Did CMS come out ahead or behind?  Well – that should be an easy question – the program seemed to net savings.  However, remember that CMS had to share some of those savings back with the provider organizations.  And because almost every organization is in a 1-sided risk sharing program (i.e. they don’t share losses, just the gains), CMS pays out when organizations save money – but doesn’t get money back when organizations lose money.  So to be fair, from the taxpayer perspective, we have to look at the cost of the program including the checks CMS wrote to ACOs to figure out what happened.  Here’s that table:

Table 3 (these numbers are rounded).

 

Total Benchmarks

Total Actual Spending

Savings to CMS

Paid out in Shared Savings to ACOs

Net impact to CMS

Total (n=392)

$73,298 m

$72,868 m

$429 m

$645 m

-$116 m

According to this calculation, CMS actually lost $116 million in 2015.  This, of course, doesn’t take into account the cost of running the program.  Because most of the MSSP participants are in a one-sided track, CMS has to pay back some of the savings – but never shares in the losses it suffers when ACOs over-spend.  This is a bad deal for CMS – and as long as programs stay 1-sided, barring dramatic improvements in how much ACOs save — CMS will continue to lose money.

Finally, we look at whether savings have varied by year of enrollment.

Question #5:  Are ACOs that have been in the program longer doing better?

Table 4.

Enrollment Year

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings

Net Per Capita Savings (Including bonus payments)

2012

$10,394

$10,197

$197

$46

2013

$10,034

$10,009

$25

–$60

2014

$10,057

$10,086

-$29

-$83

2015

$9,772

$9,752

$19

-$33

These results are straightforward – almost all the savings are coming from the 2012 cohort.    A few things worth pointing out.  First, the actual spending of the 2012 cohort is also the highest – they just had the highest benchmarks.  The 2013-2015 cohorts look about the same.  So if you are pessimistic about ACOs – you’d say that the 2012 cohort was a self-selected group of high-spending providers who got in early and because of their high benchmarks, are enjoying the savings.  Their results are not generalizable.  However, if you are optimistic about ACOs, you’d see these results differently – you might argue that it takes about 3 to 4 years to really retool healthcare services – which is why only the 2012 ACOs have done well.  Give the later cohorts more time and we will see real gains.

Final Thoughts:

This is decidedly mixed news for the ACO program.  I’ve been hopeful that ACOs had the right set of incentives and enough flexibility to really begin to move the needle on costs.  It is now four years into the program and the results have not been a home run.  For those of us who are fans of ACOs, there are three things that should sustain our hope.  First, overall, the ACOs seem to be coming in under target, albeit just slightly (about 0.6% below target in 2015) and generating savings (as long as you don’t count what CMS pays back to ACOs).  Second, the longer standing ACOs are doing better and maybe that portends good things for the future – or maybe it’s just a self-selected group that with experience that isn’t generalizable.  And finally, and this is the most important issue of all — we have to continue to move towards getting all these organizations into a two-sided model where CMS can recoup some of the losses.  Right now, we have a classic “heads – ACO wins, tails – CMS loses” situation and it simply isn’t financially sustainable.  Senior policymakers need to continue to push ACOs into a two-sided model, where they can share in savings but also have to pay back losses.  Barring that, there is little reason to think that ACOs will bend the cost curve in a meaningful way.

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Post originally appeared at An Ounce of Evidence | Health Policy: The blog of Ashish Jha — physician, health policy researcher, and advocate for the notion that an ounce of data is worth a thousand pounds of opinion.