A Framework For Understanding ‘ Savings ’ From Accountable Care Organizations

Medicare’s Accountable Care Organization (ACO) program is the Centers for Medicare and Medicaid Services’ (CMS) flagship population-based payment model. In the ACO program, groups of providers form ACOs and take accountability for the spending and quality of care for the Medicare beneficiaries they serve. The ACO is given a spending target (benchmark) and receives a bonus (i.e. gets to share savings) if actual spending is below the target. In some ACO programs, the ACO must return money to Medicare if spending exceeds the target. The release of the Office of the Inspector General’s (OIG) report on the savings resulting from the Medicare Shared Savings Program’s (MSSP) ACOs has rekindled the debate about the success of ACOs and their viability as a means to curb health care spending growth. This is an important debate, but clarity requires addressing crucial conceptual and semantic questions about the meaning of “savings.” In a previous post, we discussed the analytic issues about savings (specifically issues related to comparison groups). Our main point was that savings must be judged against a reasonable estimate of what the spending on ACO-attributed beneficiaries would have been in the absence of the ACO program. In other words, actual spending must be compared against an appropriate counterfactual level of spending. While CMS’s benchmarks are useful for setting spending targets, as elaborated below they do not always represent the appropriate counterfact...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Featured Medicare Organization and Delivery Accountable Care Organizations Medicare Shared Savings Program payer savings Pioneer ACOs societal savings utilization savings Source Type: blogs