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Accountable care organizations reduce spending without compromising care

Evaluations of three accountable care organization payment models, including the Medicare Shared Savings Program, Colorado’s Accountable Care Collaborative and Oregon’s Coordinated Care Organizations, revealed successes in overall performance and spending, but further assessment is required to address their effect on patients’ health and quality of life, according to two studies and an editorial published in JAMA Internal Medicine.

“Medicaid, the federal-state health insurance program for low-income individuals, has grown to cover more than 20% of the population nationally and accounts for a significant and growing portion of state budgets,” K. John McConnell, PhD, of the Center for Health Systems Effectiveness at Oregon Health and Science University, and colleagues wrote. “This growth poses a significant budgetary challenge, even among states choosing not to expand coverage through the Affordable Care Act. States are experimenting with a wide range of policies designed to control spending, including payment reforms that mirror aspects of Accountable Care Organizations (ACOs) in the Medicare and commercial markets.”

Early performance of Oregon’s and Colorado’s Medicaid ACOs

A comparison of Oregon’s and Colorado’s Medicaid ACO models revealed similar spending patterns; however, more improvements in some measures of utilization, access and quality were observed in Oregon’s model, according to McConnell and colleagues.

Using a difference-in-differences approach, the researchers compared the performance of Oregon’s and Colorado’s Medicaid ACO models, which were initiated in 2012 and 2011, respectively. They analyzed data from Jul. 1, 2010 to Dec. 31, 2014 — 18 months prior to and 24 months after intervention — of 452,371 Oregon and 330,511 Colorado Medicaid enrollees (45% male; mean age, 16.74 years) for changes in expenditure, utilization and quality outcomes. Oregon’s ACO was supported by a federal government investment of $1.9 billion and moved management of care of enrollees within a global budget, while Colorado’s ACO received funding to coordinate care and connect Medicaid enrollees with community services.

Results indicated that there was a decline in standardized expenditures for selected services in both states with no significant differences after the first 2 years of implementation. Significantly fewer ED visits and primary care visits were seen in Oregon compared with Colorado. In addition, Oregon’s model showed greater improvements in acute preventable hospital admissions (–1.01 admissions per 1,000 beneficiary-months), three of four measures of access (well-child visits [ages 3-6 years]; adolescent well-care visits; and adult access to preventive ambulatory care) and one of four measures of appropriateness of care (avoidance of head imaging for uncomplicated headache). There was also a decline in inpatient care days in both states.

“These results should be considered in the context of overall promising trends in both states,” McConnell and colleagues concluded. “Continued evaluation of Medicaid reforms and payment models can inform the most effective approaches to improving and sustaining the value of this growing public program.”

Provider participation in the Medicare Shared Savings Program significantly reduced postacute spending without worsening quality of care, according to a second study.

“Spending on postacute care accounts for much of the wide geographic variation in Medicare spending and has more than doubled since 2001,” J. Michael McWilliams, MD, PhD, from the department of health care policy at Harvard Medical School, and colleagues wrote. “The rapid growth in spending on postacute care has been driven by increasing use of care in skilled nursing facilities ... Excessive use of postacute skilled nursing facility care is thought to be a major source of wasteful spending.”

“The extent to which ACOs can limit postacute care spending has implications for the importance and design of other payment models that include postacute care,” they added.

McWilliams and colleagues evaluated how provider participation as ACOs in the Medicare Shared Savings Program affect postacute care spending. They conducted difference-in-difference comparisons between beneficiaries served by ACOs and beneficiaries served by local non-ACO health care professionals before and after entry into the Medicare Shared Savings Program, using fee-for-service Medicare claims data from Jan. 1, 2009 to Dec. 31, 2014, from a random 20% sample of beneficiaries (25,544,650 patient-years; 8,395,426 hospital admissions; 1,595,352 stays in a skilled nursing facility). The researchers estimated differential changes separately for ACOs entering the Medicare Shared Savings Program in 2012, 2013 and 2014.

Data showed that participation in the Medicare Shared Savings Program resulted in an overall 9% differential reduction in postacute spending from 2012 to 2014. This reduction was mainly due to declines in discharges to facilities rather than home, length of facility stays and acute inpatient care. Specific changes in care for ACO patients within-hospital or within-skilled nursing facility led to the reductions in skilled nursing facility use and length of stay. Later Medicare Shared Savings Program entry was associated with smaller reductions. In addition, reductions for ACOs with and without financial ties to hospitals were similar. There were no significant changes in 30-day readmissions (differential change in 2014 for ACOs vs control group, 0.1 [0.2 to 0.5]; P = 0.41), use of highly rated skilled nursing facilities (0.1 [2.0 to 1.8]; P = 0.89) or mortality (0.00 [0.10 to 0.11]; P = 0.94) between those served by ACOs and those served by non-ACOs.

These findings suggest that participation in the Medicare Shared Savings Program improves the value of health care, McWilliams and colleagues concluded. “Postacute care spending reductions were more consistent with efforts by clinicians working within hospitals and [skilled nursing facilities] to influence care for ACO patients than with hospital wide initiatives by ACOs or use of preferred [skilled nursing facilities]. Understanding such early successes can support regulatory policy that enhances rather than inhibits the effectiveness of payment and delivery system reforms.”

In an accompanying editorial, Carrie H. Colla, PhD, and Elliott S. Fisher, MD, MPH, both of the Dartmouth Institute for Health Policy and Clinical Practice, wrote that the results of these studies build upon current evidence on overall performance, quality of care and spending, but there is still much more to learn and understand about ACOs.

“Perhaps most important for ACO leaders and the long-term success of these programs, we know little about the key ACO capabilities that are important to ensuring their success in different organizational or market contexts,” they concluded. “Although [CMS] has conducted rigorous evaluations of the Pioneer program, generalizable findings tailored to organizational contexts are few. A long-term commitment to alternative payment model evaluation is necessary to ensure effective, sustainable payment and delivery system reforms.” – by Alaina Tedesco

References:

Colla CH, Fisher ES. JAMA Intern Med. 2017;doi:10.1001/jamainternmed.2016.9122.

McConnell KJ, et al. JAMA Intern Med. 2017;doi:10.1001/jamainternmed.2016.9098.

McWilliams JM, et al. JAMA Intern Med. 2017;doi:10.1001/jamainternmed.2016.9115.

Disclosures: McConnell and colleagues report funding by the NIH Common Fund Health Economics Program and the Silver Family Foundation. McWilliams and colleagues report support from the Laura and John Arnold Foundation and the National Institute on Aging of the NIH. Fisher reports personal fees from Hospital for Special Surgery, Price Waterhouse Cooper, Lancaster General Health, Christiana Care Health System, American College of Pathologists, Angiodynamics, Blue Cross, Blue Shield of Louisiana, National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies, Brazil, Blue Cross, Blue Shield of South Carolina, and Vizient, Signature Health Care. Fisher also reports being an unpaid member of the board of directors of the Institute for Healthcare Improvement and the Fannie E. Rippel Foundation. Colla reports no relevant financial disclosures.