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Private ACO shows promise in lowering cost, improving quality

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ACOs need critical mass to succeed

While accountable care organizations are showing promise in both the public and private sector, only widespread adoption will make a difference.

“The ACO movement is unlikely to succeed unless health insurance plans dramatically increase their number of ACO contracts and unless [the Centers for Medicare & Medicaid Services] modifies specifications for its ACO programs,” Dr. Lawrence Casalino wrote in an editorial accompanying Dr. Song’s study. “Even then, many if not most ACOs may take years to reach their potential for improving care, and it is possible that neither policy makers nor ACO leaders will be willing to wait that long.”

Dr. Casalino also warns of the unintended consequence of more hospital mergers and physician practice acquisitions. While large hospitals can bring “substantial resources” to the ACO environment, very large “hospital-centered ACOs could dominate the market not by providing better care at reasonable cost but possibly by commanding high payment rates from health insurers, marginalizing smaller hospitals and medical groups, and consigning the experience of human scale in medical care to oblivion. Antitrust enforcement may not be enough to avoid this outcome. It would be helpful if more physicians step up to the plate and take an active role in organizing and governing ACOs – a role that CMS and health insurers encourage.” (N. Engl. J. Med. 2014:371;1750-1 [doi:10.1056/NEJMe1410660]).

Dr. Casalino is a professor of public health at Weill Cornell Medical College in New York.


 

FROM THE NEW ENGLAND JOURNAL OF MEDICINE

References

A Massachusetts affordable care organization was successful at improving patients’ health while lowering costs, according to a study published Oct. 29 in the New England Journal of Medicine.

On the spending side, claims for patients enrolled in the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC) grew an average of $62.21 per enrollee per quarter less than they did in a control group of patients in other states during the 2009-2012 study period, Dr. Zirui Song of Harvard Medical School, Boston, and his colleagues reported.

“Claims savings were concentrated in the outpatient-facility setting and in procedures, imaging, and tests, explained by both reduced prices and reduced utilization,” the investigators wrote. “By 2012, the total payment growth for the AQC (claims and incentive payments combined) was below the Massachusetts state spending target of 3.6% and below the projected spending that was based on controls.”

On the quality side, the “average performance of the 2009 AQC cohort on measures of chronic disease management increased from 79.6% in the period from 2007 through 2008 to 84.5% in the period from 2009 through 2012, as compared with 79.8% and 80.8% in the respective periods for the HEDIS [Healthcare Effectiveness Data and Information Set] national average” (N. Engl. J. Med. 2014:371;1704-14 [doi:10.1056/NEJMsa1404026]).

The authors noted that state payment reform legislation in 2012, as well as Medicare’s Pioneer ACO program, may have affected the latter portion of the analysis, though most reforms did postdate the analysis.

Claims for ACO-enrolled patients were $62.21 lower per quarter than were claims for patients in the control group. © crazydiva/Thinkstock

Claims for ACO-enrolled patients were $62.21 lower per quarter than were claims for patients in the control group.

Although “our findings for 2012 may be susceptible to spillover effects, and anticipatory effects from other contracts may also play a role, our prior analyses that used internal controls, the consistency of the sensitivity analyses, and qualitative findings from interviews with providers suggest that the AQC played a meaningful role,” Dr. Song and his colleagues wrote.

The findings might not translate to the Medicare ACO program since most Medicare ACO contracts “are one-sided with shared savings only. Moreover, prices in Medicare are largely uniform rather than negotiated, so savings for Medicare would require reductions in utilization or shifts to less-expensive settings (rather than referrals to less-expensive providers). Similarly, our results may not be generalizable to other states, which face different constraints and challenges,” they said.

gtwachtman@frontlinemedcom.com

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