Modern Healthcare this week explored how one accountable care organization (ACO) was able to generate shared savings during the first year of Medicare's Pioneer Program, while another fell short of cost targets.
Financial results released this week for the first year of the ACO pilot were decidedly mixed, according to Modern Healthcare's Melanie Evans. CMS data showed that all 32 participants improved the quality of patient care in the first year of the program, but only about one-third lowered costs enough to generate shared-savings.
The same day, the agency announced that seven ACOs that did not produce savings in the first year of the program will switch to the Medicare Shared Savings Program (MSSP), and two will abandon Medicare accountable care models altogether.
How Beth Israel saved money
According to successful Pioneer participants and outside experts, using refined data analytics helped generate cost savings. For example, Pioneers leveraged "predictive analytics to identify the at-risk patients more easily," says Don Fisher of the American Medical Group Association, many of whose members were participants.
At Beth Israel Deaconess Care Organization, administrators used a "sophisticated computer algorithm" to target high-risk patients, said Richard Parker, chief medical officer for the Boston-based ACO, which lowered costs for its 30,000 beneficiaries by 4.2%, producing $15 million in shared savings.
For example, chronically ill patients who received care in the hospital's EDs were selected for the organization's nurse practitioner home visit program, which involved monthly at-home sessions. Similarly, the next-lower tier of sick patients benefited through both telephone and personal visits from RNs serving care managers.
Parker also attributes Beth Israel's success to the primary care network's leadership structure, which includes 21 physician groups located through northern Massachusetts, Cape Cod, and suburban Boston. Each clinic has a primary care physician leader who is an expert on how to manage patient health on a fixed budget. The PCP communicates with colleagues about care management and service utilization.
"It's necessary to have a primary care structure in order to communicate with all primary care physicians what the programs are, and to understand how to continually improve quality and decrease unnecessary utilization," Parker said.
How Atrius Health lost money
Meanwhile, Atrius Health—an alliance of six physician groups in the Massachusetts region—potentially owes Medicare $2 million for spending more on their beneficiaries than fee-for-service providers, but administrators say they will continue on in the Pioneer program.
Gene Lindsey, president and CEO for the network of multispecialty physician groups, says the alliance struggled because of Medicare's "extremely low budget" for the ACO to begin with, adding that Atrius had already adopted cost-control measures that left the organization without extra savings.
However, Lindsey says that Atrius' financial losses obscure the progress it made on measures of health care quality and efficiency. "Our objectives were not to do well in a particular financial cycle," Lindsey said, adding, "We believe the payoff is going to be the accumulated clinical transformation."
Atrius expects to recoup any losses and investments that were made to launch the ACO in coming years (Evans, Modern Healthcare, 7/16 [subscription required]; Zigmond, Modern Healthcare, 7/16 [subscription required]).
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