Pioneer ACOs’ first-year results leave a lot of room for improvement

Contributor: Jane Dubose - HealthLeaders-InterStudy

For those ACO watchers who are in the glass-half-empty camp, there was plenty of spilled milk to absorb from the government’s preliminary report on the Medicare Pioneer and Shared Savings Programs released Jan. 30.

Pioneers are the organizations that began contracting with the federal government in 2012 to coordinate care and agree to follow quality care guidelines for Medicare beneficiaries. Pioneers volunteered because they have experience in managing care for patient populations – for the most part, they are sophisticated health systems or organized physician groups with IT and staff resources.

All of that makes the report based on 2012 results even more sobering. Of the 32 original Pioneers, 23 of them spent no less on Medicare patients than local markets to which they were compared. Taken together, the 32 Pioneers produced $20 per beneficiary, per month savings for Medicare had the individuals not been aligned to an ACO. That’s $240 per person a year--maybe the cost of a single prescription for a month. (Last summer, nine Pioneers left the program, but last month’s release was based on the total group’s data).

Altogether, the Pioneers produced savings of about $147 million, a drop in the bucket for the entire Medicare budget, and certainly much less than the amount spent to develop the infrastructure to support the ACOs. Officials with the Centers for Medicare & Medicaid Services – which is managing the Pioneer and the Medicare Shared Savings Program (MSSP) ACOs – said some progress is better than none, and the program will take time to produce more significant savings.

They’re obviously working on a number of problems revealed in the Pioneers report from L&M Policy Research, and likely many more we don’t know about. Among them:

• Inpatient spending – Pioneers showed no significant difference in slowing inpatient spending than FFS comparison markets. Two of the Pioneers saw inpatient costs grow faster than local markets.
• Post-acute care – This grew faster for Pioneers than FFS, but that might not be a bad thing as Pioneers could have substituted skilled nursing on home health care for higher acute-care hospital settings.
• Disease, gender, age differences – Fewer savings were associated with older beneficiaries and women. Although the study stressed the models are in an early stage, only acute myocardial infarction (AMI), colorectal cancer, and stroke showed a significant relationship with treatment effects.