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

In Pursuit of the Triple Aim: Can Population Health Management Lead the Way?

By Fred Goldstein, MS and Gregg Masters, MPH

Every sector in health care is under pressure to articulate and implement a viable population health initiative that delivers on the triple aim of better health, better quality at a better cost.

Despite a significant investment of resources, we have only achieved ‘mixed results’ to date, and so the industry remains in a continuous learning mode. Although we’ve taken away some insights, we still have a long way to go.

Recently on Pophealth Week, we chatted with the ‘Dean’ of Population Health who spearheaded and continues to steward the nation’s first freestanding College of Population Health at Jefferson University in Philadelphia. David Nash, MD, MBA weighed in on the industry’s evolution — including best practices to emulate —and what near term challenges we are likely to face.

To listen to Dr. Nash’s take, click here, and for additional context checkout The Road From Volume-To-Value: The Pivotal Role of Population Health.

If you’ve worked in this space – at the strategy or operational level — you know that it can be truly daunting to implement a population health program. This can lead some organizations to shy away from attempting meaningful programs, perhaps even into a copycat ‘me too’ effort. Given the inevitable drive to value-based care, it is a strategic imperative to understand how to build and implement population health initiatives that work.

In its simplest framework, one can think of a population health program in terms of the following components as articulated by the Population Health Alliance Outcomes Guidelines Report Volume 6,  2015.

The steps of the Population Health Framework as shown in the image above include:

  • Identify the population
  • Assess the person for risk(s)
  • Stratify the person into risk levels to target for various interventions
  • Engage the person in a program
  • Intervene with specific services and resources and
  • Measure the process and outcome results

These results are then fed back into the system and the process continued all seeking to improve the overall health of the population.

In Search of Answers

One forum many look to for best practices and key insights is the Population Health Colloquium, now in its 18th year with the Jefferson College of Population Health as academic partner. Scanning this year’s Agenda, one can find presentations in each of the elements above.

Data and Analytics are the essential ingredients of any population health program with intent to identify individuals, assess them for various risks or conditions, stratify them to ensure appropriate levels of intervention and measure a program’s success.

Within the area of assessment, we are moving to an ‘N of 1’ approach given the advances in precision medicine and genomics. This exciting area will be covered at the conference in the mini summit entitled Personalized Medicine, Machine Learning and Genomics: a Clinical Approach to Employer Population Health and Wellbeing.

Payment models and the move to value-based care are among the key levers. Although there have been more than a few stops and starts along the way with the change in administration at the federal level, employers are rapidly embracing these approaches.  There are a number of presentations on this topic, including Journey to Value-Based Care — Experience and Expectations, Accountable Care Atlas: Mapping a Path to Value-Based Care and a Mini Summit ACOs at an Inflection Point: Where the Movement is Headed and Why Some Succeed While Others Don’t.

In the Intervention area, there are presentations covering ‘On the Ground: Population Health initiatives’… and we can’t forget about the patients — they, too, have a strong role to play in these efforts. The Mini Summit, Improving Patient Care and Provider Experience through Population Health Management, is timely and informative.

Community-based programs have become all the rage as we better understand the impact on your health based on where and how you live.  A breakout track entitled Population Health in the Community includes discussions on life expectancy gaps in Chicago; Rural and Urban Issues; and primary care and behavioral health that will address some of the approaches.

The program will feature a session on designing and implementing population health, and of course there will be some incredible keynotes and small panel discussions. The program includes a discussion with two former HHS Secretaries, Tommy Thompson and Michael Leavitt, and baseball great Darryl Strawberry will discuss addiction, a critical issue we are now facing with the opioid crisis.

If you are committed to learning more about Population Health, this meeting is a must. It’s an event where you can learn from experts covering the full breadth of population health services and have an opportunity to network. Whether you choose to travel to Philadelphia or attend via live webinar, please plan to join us and stop by to say hello. We’d love to hear all about what you’re doing in this exciting space.

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This post is sponsored by the Jefferson College of Population Health

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

What, What? ACOs Not ‘DOA’?

by Gregg A. Masters, MPH

When the Affordable Care Act passed in March of 2010 and the law’s many moving parts analyzed by the ecosystem stakeholders including operators, health wonks and patient advocates many weighed in that ACOs were doomed to fail. They were just too ‘tepid’ to make a material contribution to the volume to value transformational journey. Complaints included little control over patients who ‘voted with their feet’ while ACOs bore the liability of their choices whether in upside only track vs. the downside of exposure of track two, flawed retrospective attribution methodologies and data dumps and reporting lags from CMS all handicapped the proactive management of ‘risk’ assumed by participating ACOs in the Medicare Shared Savings Program (MSSP).

Noted futurist Jeff Goldsmith captured the spirit in Pioneer ACOs: Anatomy Of A ‘Victory’ post in Health Affairs:

With over 17 million Medicare beneficiaries voluntarily choosing MA thus far, and enrollment growing at more than 10 percent annually despite three years of CMS payment reductions in real dollars, it is increasingly clear the future of managed Medicare lies in the MA program, not with directly contracted shared savings models.

Co-incident with the ramp up of the Medicare ACO cohort the private sector jumped on the bandwagon, operating with higher degrees of contractual terms and conditions freedom than promulgated by CMS to participating MSSP’s. Aetna, the Blues, United et al negotiated their version of ‘accountable care’ arrangements with participation IPAs, PHOs, IDNs, health systems, medical groups or physician networks.

Five years later, we have some important data recently reported by Health Affairs that suggests ACOs are far from the neutered enterprises many suggested and while mixed in terms of results reported ACOs have found their place in the managed competition ecosystem and are not likely to disappear any time soon.

The headline at Health Affairs is as follows: Growth Of ACOs And Alternative Payment Models In 2017.

As of the end of the first quarter of 2017, our inventory included 923 active public and private ACOs across the United States, covering more than 32 million lives (Figure 1). The increase of 2.2 million covered lives in the past year means that more than 10 percent of the U.S. population is now covered by an accountable care contract (Note 1).

As the ACO model matures, there is now some turnover, with organizations joining and leaving the model. Since the first quarter of 2016, 138 new ACOs began operation, and 46 ACOs dropped their accountable care contracts, representing a net increase of 92 organizations becoming ACOs, or an 11 percent growth.

From the nominal ACO count basis to the number of lives associated with the aggregate arrangements, this is an impressive tally for such an allegedly ‘anemic‘ model!

Now enter the Next Generation ACO Model. For details, see: Next Generation ACOs: A Deep Dive Series and Meet the Next Generation ACO Cohort.

 

 

 

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Posted in Accountable Care, ACO, Affordable Care Act, TrumpCare

Webinar: Next Generation ACO Model – Overview and LOI Information

By Gregg A. Masters, MPH

Webinar: Next Generation ACO Model - Overview and LOI Information Select link to open options forShare
Click to register!

Today marks the end to the eight year reign of President Barack Obama and the birth of the Trump Administration tenure.  Yet, so much in the health policy and reform domain remains unclear and on the come.

Since the passage of the Affordable Care Act (ACA) in March of 2010 the implementation of the delivery system side of the reform to restrain if not reduce healthcare spending has been vested primarily in a range of variably sophisticated ACOs and other participants in a tapestry of value based healthcare arrangements from bundled payments to patient centered medical homes and even the more risk savvy cohort of Medicare Advantage operators.

What is clear is change is on the horizon; yet just what the nature of that change will look like will probably reveal itself over the next several months and perhaps even years. For our discussion of what appears to be the emerging indicia of a ‘TrumpCare‘ chassis, Health Innovation Media principals share insights via: ‘On @PopHealthWeek: #Trumpcare What We Know @fsgoldstein @efuturist @2healthguru‘ and ‘A #TrumpCare Roundtable with @efuturist, @fsgoldstein and @2healthguru‘.

screen-shot-2017-01-20-at-1-52-24-pmClearly the era of ‘accountable care‘ and the provider organizations designed to explore and implement their local market vision of an entity that delivers accountability is not likely to come to an end as President Trump occupies the White House. In fact, though I have been deeply skeptical of the rather hollow ‘repeal and replace‘ mantra absent a material Republican replacement option, I am somewhat encouraged by the tempered optimism proffered by Ezekiel Emanuel, M.D., Ph.D., Former Chief Health Policy Advisor to the Obama Administration, to an informed audience at the Commonwealth Club of San Francisco earlier this month.

Meanwhile, I doubt the Trump Administration and his HHS and CMS appointees (Rep Tom Price and Seema Verma, respectively) once confirmed will advocate for an era of ‘unaccountable care‘ with a return to unbridled to fee-for-services medicine. Thus, I bank on the continued evolution and deployment of ACOs as progressive risk bearing entities and continuing clinical integration plays. However, we shall see!

We do indeed live in interesting times!

 

 

 

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

 

 

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.