Early Performance of Accountable Care Organizations in Medicare

McWilliams, J. Michael; Hatfield, Laura A.; Chernew, Michael E.; Landon, Bruce E.; Schwartz, Allen D.

doi:10.1056/nejmsa1600142

Cited by 326 publications

(352 citation statements)

References 25 publications

(28 reference statements)

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“…Evidence from the Pioneer ACO program, which targeted more advanced delivery systems with greater financial risk, have been modestly positive. An analysis of the first year of the program found that it was associated with a 1.2% reduction in Medicare spending (70). Another study of the first two years of the program found that beneficiaries attributed to Pioneer ACOs had smaller increases in total expenditures compared with general Medicare FFS beneficiaries (72).…”

Section: The Effectiveness Of Incentives Under the Acamentioning

confidence: 99%

“…Another study of the first two years of the program found that beneficiaries attributed to Pioneer ACOs had smaller increases in total expenditures compared with general Medicare FFS beneficiaries (72). However, little to no savings have been observed in the much larger MSSP (70). In addition, the Pioneer model appears to be failing: Of the original 32 Pioneer ACOs, only 9 have remained in the program (17,69).…”

Section: The Effectiveness Of Incentives Under the Acamentioning

confidence: 99%

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Impact of Provider Incentives on Quality and Value of Health Care

Doran

Maurer

Ryan

2017

Annu. Rev. Public Health

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The use of financial incentives to improve quality in health care has become widespread. Yet evidence on the effectiveness of incentives suggests that they have generally had limited impact on the value of care and have not led to better patient outcomes. Lessons from social psychology and behavioral economics indicate that incentive programs in health care have not been effectively designed to achieve their intended impact. In the United States, Medicare's Hospital Readmission Reduction Program and Hospital ValueBased Purchasing Program, created under the Affordable Care Act (ACA), provide evidence on how variations in the design of incentive programs correspond with differences in effect. As financial incentives continue to be used as a tool to increase the value and quality of health care, improving the design of programs will be crucial to ensure their success.

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Section: The Effectiveness Of Incentives Under the Acamentioning

confidence: 99%

Section: The Effectiveness Of Incentives Under the Acamentioning

confidence: 99%

Impact of Provider Incentives on Quality and Value of Health Care

Doran

Maurer

Ryan

2017

Annu. Rev. Public Health

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“…With respect to cost savings of ACOs, McWilliams et al (2016) compares spending and quality measures before and after the start of ACO contracts and find that the first full year of SSP contracts was associated with early reductions in Medicare spending among 2012 entrants but not among 2013 entrants, and savings were greater in independent primary care groups than in hospitalintegrated groups. Shulman and Richman (2016) argue that hospital-led ACOs impose above-average costs on consumers and insurers, and they suggest pursuing a more economic model for an effective delivery system: Pay physicians and physician-led groups to keep patients away from and out of hospitals, away from costly facilities and tests, and use inpatient services only when other low-cost mechanisms are not effective.…”

Section: Comparative Literature On Acos and Medicare Advantagementioning

confidence: 99%

Potential “Savings” of Medicare: The Analysis of Medicare Advantage and Accountable Care Organizations

Brockett

Golden

Yang

2018

North American Actuarial Journal

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Medicare faces significant financial challenges because of rising health care costs. In response, Medicare reform efforts have been testing various payment and service delivery models, including accountable care organizations (ACOs), aiming to reduce expenditures while preserving or enhancing the coordination of quality care. The idea behind ACOs is to form an organizational network to coordinate all care for Medicare beneficiaries and in so doing, at least theoretically, improve quality of care and hopefully reduce medical costs. The purpose of this research is to apply Data Envelopment Analysis (DEA) to assess the potential savings of Medicare obtainable through optimally efficient implementation of ACOs and Medicare Advantage plans. DEA comparisons across plans achieve this purpose by identifying which Medicare plans operate relatively more efficiently and which are inefficient, and additionally, for inefficient plans, the DEA analysis generates target levels of "inputs" and "outputs" required to bring the plan into efficient operation. Knowing sources of inefficiency can also provide insights into Medicare reform, such as Medicare privatization and innovation models. Our results show that Medicare Advantage plans are more efficient in reducing health expenditures but incur higher administrative costs. Health expenditure savings can also be achievable by promoting government-sponsored managed Medicare such as ACOs. Finally, compared to the profit efficiency of Medicaid managed care plans, Medicare Advantage should have the potential for more Medicare market penetration from the supply (insurer) side.

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“…Early experience from the MSSP as well as the Pioneer ACO program suggests that the most expensive baseline providers were the most likely to save money, supporting this possibility. 19,20 However, only rewarding improvement may also mean giving financial rewards to providers who have improved, but are nonetheless delivering suboptimal or even substandard care, or, on the other hand, failing to reward persistently excellent performers whose year-upon-year performance changes little.…”

Section: Rewarding Improvement or Achievementmentioning

confidence: 99%

Elements of Program Design in Medicare’s Value-based and Alternative Payment Models: a Narrative Review

et al. 2017

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Increasing emphasis on value in health care has spurred the development of value-based and alternative payment models. Inherent in these models are choices around program scope (broad vs. narrow); selecting absolute or relative performance targets; rewarding improvement, achievement, or both; and offering penalties, rewards, or both. We examined and classified current Medicare payment models-the Hospital Readmissions Reduction Program (HRRP), Hospital Value-Based Purchasing Program (HVBP), Hospital-Acquired Conditions Reduction Program (HACRP), Medicare Advantage Quality Star Rating program, Physician Value-Based Payment Modifier (VM) and its successor, the Merit-Based Incentive Payment System (MIPS), and the Medicare Shared Savings Program (MSSP) on these elements of program design and reviewed the literature to place findings in context. We found that current Medicare payment models vary significantly across each parameter of program design examined. For example, in terms of scope, the HRRP focuses exclusively on riskstandardized excess readmissions and the HACRP on patient safety. In contrast, HVBP includes 21 measures in five domains, including both quality and cost measures. Choices regarding penalties versus bonuses are similarly variable: HRRP and HACRP are penalty-only; HVBP, VM, and MIPS are penalty-orbonus; and the MSSP and MA quality star rating programs are largely bonus-only. Each choice has distinct pros and cons that impact program efficacy. Unfortunately, there are scant data to inform which program design choice is best. While no one approach is clearly superior to another, the variability contained within these programs provides an important opportunity for Medicare and others to learn from these undertakings and to use that knowledge to inform future policymaking. Take-Home Points • Increasing emphasis on value in health care has spurred the development of value-based and alternative payment models. Inherent in these models are choices around program scope; selecting absolute or relative performance targets; rewarding improvement, achievement, or both; and offering penalties, rewards, or both.• We examined current Medicare value-based and alternative payment models on these elements of program design and found that while current models vary significantly across each parameter, there are scant prior data to inform which choice is best.• Such variability in program design may represent an important opportunity to learn from existing models and create new ones in the future.

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Early Performance of Accountable Care Organizations in Medicare

Cited by 326 publications

References 25 publications

Impact of Provider Incentives on Quality and Value of Health Care

Impact of Provider Incentives on Quality and Value of Health Care

Potential “Savings” of Medicare: The Analysis of Medicare Advantage and Accountable Care Organizations

Elements of Program Design in Medicare’s Value-based and Alternative Payment Models: a Narrative Review

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