The ACO Experiment, Early Results Are In

As I’ve previously written, I believe that ultimately Accountable Care Organizations (ACOs) will be successful in lowering healthcare costs and improving overall quality. In reading the November 2012 edition of Health Affairs and through internet research, some encouraging results from ACOs can be found:

•  Advocates commercial ACO collaboration with Blue Cross Blue Shield of Illinoiscovers 260,000 members. They achieved cost growth for assigned members that was two percentage points lower in the first year than the growth in a control group, and showed high performance on clinical quality and service measures

•  Dignity Health, Blue Shield of Californiaand Hill Physicians Medical Group had annual growths rate in per member per month costs of 3 percent, which was less than half the growth rate of the previous decade. Hospitals days and readmissions declined 15%, saving $20million.

•  In Massachusetts, Blue Cross Blue Shield of Massachusetts is working with 11 provider organizations covering 600,000 members. In it’s first 2 years, they’ve been able to achieve savings of 2.8 percent per member in medical costs compared with spending in non participating groups, while showing improved quality of care as well.

•  Cigna’s Collaborative Accountable Care initiative was launched in 2008 and is currently implemented in 42 practices. Some early results are as follows:

○  The Cigna Medical Group is a division of Cigna of Arizona. It is a multispecialty group with 158 physicians covering 14,575 patients in Maricopa County, Arizona. Early results (2010) showed that total medical costs were $27.04 per patient per month more favorable than the costs in its comparison group. This difference was in fact, statistically significant.

○  Dartmouth-Hitchcock Health is an academic, integrated delivery system with 1,018 physicians and 16,654 patients in New Hampshire and Vermont. Although not as impressive as in Arizona, medical costs were shown to be $1.78 better per patient per month than the comparison group.

○  The Medical Clinic of North Texas has 141 primary care physicians and 8,753 patients in the Dallas Fort Worth area. Medical costs were shown to be $6.56 better per patient per month than the comparison group.

○  Quality: The three practices were indeed superior to their comparison group peers on all care quality measures with one exception, the New Hampshire practice’s screening of hemoglobin A1c levels among patients with diabetes

○  A recent study by the Dartmouth Institute for Health Policy and Clinical Practice looked at the cost savings associated with the Physician Group Practice Demonstration, a pilot program that was a precursor to the newer Pioneer, Sharing Savings, and Advanced Payment ACO models. Researchers considered Medicare administrative data from 2001 to 2009 to determine the per-beneficiary savings from the program. Analysis showed overall annual savings of $114 per Medicare beneficiary and $532 (or about five percent) per patient covered by both Medicare and Medicaid. Thirty-day medical readmission rates dropped for both populations and surgical readmissions fell for the dually eligible patients.

I’ll work to compile results as they are published. Whether the new model is called Accountable Care or whether it looks exactly like it does today, we’ll have to see. However, it looks like we are clearly headed in a direction where we will focus on managing populations, in a risk bearing model for the purpose of increasing quality and reducing costs.

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