The Accountable Care Organization model may help healthcare providers lower their spending on Medicare patients, and those outcomes may extend to other patient groups as well, according to a study published in the Journal of the American Medical Assn. Healthcare groups that launched payment incentives through
Massachusetts medical providers who implemented payment incentives through a commercial ACO were inspired to spend less on Medicare patients who were not covered by an alternative quality contract, researchers reported. Based on an analysis of Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract, an early commercial ACO initiative, researchers concluded that the ACO model may prove a boon to clinic spending without sacrificing the quality of care.
"In response to mounting pressures to deliver more cost-effective care, provider organizations have exhibited increasing willingness to assume financial risk for the quality and costs of the care they provide,” the study authors noted. More than 250 provider groups have contracted with Medicare as ACOs, and have reached “many similar payment arrangements” with commercial insurers, they added.
"In a multi-payer system, new payment incentives implemented by one insurer for an ACO may also affect spending and quality of care for another insurer’s enrollees served by the ACO. Such spillover effects reflect the extent of organizational efforts to reform care delivery and can contribute to the net impact of ACOs," according to the study.
Researchers compared elderly fee-for-service Medicare beneficiaries in Massachusetts served by 11 provider organizations who entered the AQC in 2009 or 2010 (intervention group) to beneficiaries served by other providers from 2007-2010 (control group). The researchers assessed total quarterly medical spending per beneficiary by estimating changes in spending and quality for the intervention group in the 1st and 2nd years of exposure to the AQC relative to “concurrent changes” for the control group.
Researchers also evaluated spending by setting and type of service, 5 process measures of quality, potentially avoidable hospitalizations and 30-day readmissions. The researchers did not find statistically significant socio-demographic and clinical differences in the intervention group compared to the control group.
"Our findings have several implications for payment and delivery system reforms,” the study authors concluded. “In general, cost-reducing spillover effects of ACO contracts with one insurer on care for other insurers’ enrollees should signal a willingness among provider organizations generating the spillovers to enter similar contracts with additional insurers; they could be rewarded for the savings and quality improvements achieved for the other insurers’ enrollees.”
Although the cost savings from early ACO initiatives could motivate
ACOs to move to global payment arrangements with multiple payers, a “free riding problem” comes up when competing insurers with similar provider networks offer lower premiums without incurring the costs of managing an ACO, the study authors pointed out.
“Additional efforts to foster multi-payer participation in global payment systems, such as recent state initiatives and provisions in Pioneer Medicare ACO contracts, may be important,” they said.
Quality of care was not compromised despite the modest reductions in spending for Medicare beneficiaries, the study authors noted.
The study findings suggest a “potential for these payment models to foster systemic change in care delivery. Evaluations of ACO programs may need to consider spillover effects on other patient populations to assess their full clinical and economic benefits," the researchers conclude.