(Reuters) — A U.S. government test program with doctors and hospitals slowed healthcare spending in Medicare coverage for the elderly and disabled by hundreds of millions of dollars in 2012 and 2013, but the savings were less in the 2nd year, according to a study released today.
The Journal of the American Medical Assn. study looked at beneficiaries in 32 "Pioneer" accountable care organizations, in which hospitals and doctors follow 33 quality and care standards for Medicare fee-for-service patients. In return they can receive a portion of any healthcare savings back from the government.
The rate of savings was 4% in the 1st year, or a total of $212 million, and less than 1.5%, or $105 million, in the 2nd year. The savings are based on a comparison against spending on beneficiaries in the traditional Medicare fee-for-service program.
The program is part of the national healthcare reform law, or the Affordable Care Act, which aims to cut national healthcare spending through a variety of measures including more preventive health services and the extension of insurance to most people.
The program’s decline in savings between the 1st and 2nd year could be due to the organizations grasping "the low-hanging fruit," Dr. Lawrence Casalino of Weill Cornell Medical College said in a JAMA editorial accompanying the study.
It suggests that either savings will always be smaller in subsequent years, or that it will take time for the organizations to develop better processes that will lower costs in future years, Casalino wrote.
Some aspects of the Pioneer program are being incorporated into 2 new risk-sharing care models being developed, Patrick Conway, acting principal deputy administrator at the Centers for Medicaid & Medicare Services, said during a press briefing.
Some ACOs are expected to move into either the next Pioneer model or into the Medicare shared savings program, he said. Of the 32 ACOs that began in the Pioneer program, 19 are still participating.
Conway said additional healthcare organizations have expressed interest in both the existing and new programs.